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Made easy
AJ Bell plc
Annual Report and Accounts 2024
Investing
As one of the UK’s leading
investmentplatforms, our aim is to
help our customers take control of
their investments. We want them to
have peace of mind because they are
investing in their future, and closing the
gap between where they are today
and their aspirations for later in life.
That’s why everything we do,
fromourgreat-value products
toourexpert customer service,
isdesigned to makeinvesting easier.
Strategic report
01 Our purpose
04 Investment case
06 Chair’s statement
08 Chief Executive Officer’s review
16 Market overview
20 Business model
22 Key performance indicators
24 Stakeholder engagement
26 Section 172 statement
28 Responsible business
46 Climate-related Financial Disclosures
53 Non-financial and sustainability
information statement
54 Chief Financial Officer’s review
58 Risk management
61 Principal risks and uncertainties
67 Viability statement
Governance
70 Chair’s introduction
72 Board of directors
74 Corporate Governance report
84 Nomination Committee report
88 Audit Committee report
94 Risk & Compliance
Committeereport
98 Directors’ Remuneration report
120 Directors’ report
123 Statement of Directors’
responsibilities
Financial statements
126 Independent auditor’s report
to the members of AJBell plc
132 Consolidated income statement
133 Consolidated statement
of financial position
134 Consolidated statement
of changes in equity
135 Consolidated statement
of cash flows
136 Notes to the consolidated
financial statements
164 Company statement
of financial position
165 Company statement
of changes in equity
166 Notes to the Company financial
statements
Other information
172 Consolidated unaudited
five-year summary
173 Glossary
174 Definitions
174 Company information
Assets under administration (AUA)
1
£92.2bn
+21%
Performance
highlights
Revenue
£269.4m
+23%
Total customers
1
557,000
+13%
Profit before tax (PBT)
£113.3m
+29%
Find out how we are
makinginvesting easy
andmoreat
ajbell.co.uk/group
Highlights
– Delivered excellent customerservice
4.8-starTrustpilot score
– Investing in our easy-to-usepropositions
Reduced charges on both our advised
andD2C platform propositions
– Impressive customer growth
Totalplatformcustomers surpassed half
amillion
– Record financial performance
AchievedrecordAUA, revenue and PBT
1. Total assets under administration (AUA) and customers
include non-platform AUA and customers. See pages 22
and 23 for definitions of Alternative Performance Measures.
How we are
makinginvestingeasy
Our purpose is to help people invest
We want to make investing as easy as possible for our customers to enable them to take control
of their finances and realise their financial goals.
why we exist
We serve the needs of our customers
We offer a range of products to help our customers and advisers achieve their financial goals.
We make investing easy
Our business model and strategy contain the key focus areas and activities that ensure we achieve our purpose
of helping people to invest. There are three strategic drivers that harness what we deliver to customers and advisers
and how we do it.
We are creating sustainable value...
...for our stakeholders...
Our guiding principles are the foundation of our company culture. They help drive our behaviours and decisions
and remind us that customers are at the heart of everything we do.
...by growing our business responsibly
What we doHow we do it
Who we deliver for
Advised market
Ease of use
We make it easy
for customers to invest
Trust
We earn the trust
of our customers
Low-cost
We offer great value
to our customers
Principled
We act
withintegrity
Knowledgeable
We know
our stuff
Straightforward
We simplify
thecomplex
Personal
We put
peoplefirst
Ambitious
We set high
standards
Our customers and
their advisers
Our people Our shareholders Other stakeholders
Responsible
propositions
Responsible
employer
Supporting our
local communities
Environmental
awareness
D2C market
AJ Bell plc Annual Report and Accounts 2024 1
SimplifiedComplex
We develop our platform with a focus on making
it easy to invest. For over 25 years, AJBell has
been providing award-winning products and
services to make investing easyandaffordable.
We take the fear out ofinvesting for our
customers and advisers, withour easy-to-use,
no nonsense propositions.
We have been AJBell clients for
almostfour years. We are both in
our70s and were new to investing.
Thewebsite is easy to navigate and
packed with information for novices
likeus. They made it so easy. On the
occasions we’ve had to speak to
Dealing Services, Customer Services
etc everyone has been easy to talk to
– professional, polite, knowledgeable
and very helpful. The weekly Shares
Magazine they produce has really
helped us – it feels like it’s written
justfor us!
Gilly Groom
AJBell customer
Making investing easy
Strategic report
Governance Financial statements Other information
AJ Bell plc Annual Report and Accounts 2024 32 AJ Bell plc Annual Report and Accounts 2024
Recurring
ad valorem
75.0%
Transactional
13.1%
Recurring fixed
11.9%
Investment case
Why invest in AJBell?
Since our IPO in 2018 we have delivered
consistently strong organic growth in
customers and AUA, driving market share
gains in the growing platform market.
Thisgrowth, combined with our efficient
business model, has delivered high levels
ofprofitability and cash generation, enabling
us to pay a progressive ordinary dividend
each year. Our focus on providing easy-to-
use, low-cost products alongside market-
leading customer service means that we
arewell-positioned to continue to capitalise
on the significant growth opportunity.”
Michael Summersgill
Chief Executive Officer
1
Our market
5
Our business model
4
Our people
2
Our propositions
6
Quality of earnings
3
Our customers
7
Cash generation
A growing market within the UK retail
savings and investment industry
A profitable and scalable platform with
long-term margin expansion opportunities
An entrepreneurial management team
anda highly engaged workforce
An award-winning platform operating in
both advised and D2C market segments,
with in-house investment solutions
Largely recurring revenue, from a
diversified mix of revenue streams
A growing base of loyal,
high-qualitycustomers
A highly cash-generative and capital light
model which supports a progressive annual
ordinary dividend
The platform market
continues to benefit
from long-term
structural growth
insociety and
demographics,
government
legislation,and
technology.
Our dual-channel
platform delivered
another period
ofstrong organic
growth.
Our single operating
model ensures
efficiency in serving
both markets and
provides us with
opportunities for
margin improvements.
Certified as a Great
Place to Work with
atotal score of 83%,
placing us amongst
the best large
companies in
thecountry.
We continue to
encourage our staff to
share in the success of
our business, with
record numbers of
employees partaking
in share ownership in
the year.
We continually invest
inour propositions with
a focus on ease of use,
delivering a number
ofdevelopments in
theyear.
Our range of simple,
low-cost investment
solutions continues to
perform exceptionally
well with total AUM
increasing by 45%
to£6.8 billion.
Our diversified
revenue model is
resilient in different
macroeconomic
conditions, delivering
strong revenue growth
of 23% in FY24.
Improved retail
investor sentiment and
strong equity markets
have helped to drive
custody fees and
transactional
feeshigher in FY24.
Total platform
customers surpassed
half a million this year,
increasing from just
below 200,000 when
we listed in 2018.
We introduced
significant pricing
reductions during
theyear, sharing the
benefits of scale
toremain highly
competitive in
themarket.
Net cash generated
from operations
totalled £96.3 million,
with cash balances
reaching £196.7
million at the year end.
Total ordinary dividend
of 12.50 pence per
share and returning
upto £30 million
ofsurplus capital in
theform of share
buybacks in FY25.
Total addressable
market
£3tn
PBT margin
42.0%
Staff with shares
inAJBell
79%
Customer retention rate
94.2%
Diversified mix of
revenue types
£269.4m
New customers in FY24
66,000
Successive years
ofordinary dividend
growth
20 years
Current platform market
AUA~£1.1tn
AJBell platform AUA
£86.5bn
See p16 See p20See p34
See p10 See p54See p12 See p54
2019 2024
12.50p
4.83p
Strategic report Governance Financial statements Other information
4 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 5
Five-year dividend growth
pence
6.16
5.00
6.96
7.37
11.96
10.75
12.50
2020 2021 2022 2023 2024
Ordinary dividend
Special dividend
Chair’s statement
Building on a
strongculture
AJBell rightly prides itself on
itsopenand transparent culture
whichpermeates throughout the
whole organisation.”
Fiona Clutterbuck
Chair
Dear shareholder
This year I have thoroughly enjoyed
immersing myself in the business to gain
adeeper understanding of its drivers and
culture. AJBell is a fantastic business; with
astrong management team, collaborative
Board and a track record of delivering growth.
Our dual-channel business model is a real
strength in the investment platform market
and our focus on ease of use and low-cost,
ensures we are well-positioned to deliver
sustainable growth for the longer-term.
We have delivered an excellent set of results
this year with PBT of £113.3 million. Over the
past 12 months customer numbers increased
by 66,000 to 557,000 and we delivered £6.1
billion of net inflows, ending the year with total
AUA of £92.2 billion. Our strong performance
reflects the investment we have made in our
brand and propositions and our ongoing
commitment to deliver excellent customer
service, alongside improved retail investor
confidence. Michael discusses our business
performance and strategic progress in more
detail on pages 8 to 15.
This year the Board’s primary areas of focus
were succession planning at both Board
andExecutive Committee (ExCo)level and
onboarding of new members, as well as
ensuring that the right strategy is adopted to
deliver sustainable success for the Company.
As aBoard we have aimed tosupport and
appropriately challenge ExCo on their strategic
priorities, for the benefit of all our stakeholders.
Compliance Committee, succeeding Simon
Turner who completed nine years’ service and
stepped down from the Board on 31 March
2024. On behalf of the Board I would like to
thank Simon for his significant contribution to
the Company during his tenure and particularly
for his support with the succession process for
the Chair of Risk & Compliance Committee
and ensuring a smooth handover to Fiona.
We were also delighted to welcome
JulieChakraverty to the Board on 1 June
2024,concluding our search for a further
independent Non-Executive Director. Julie
brings more than 30 years’ experience in the
financial services, consumer and cyber sectors
which will be invaluable to the Board as we
continue to focus on our strategic priorities.
The Board values diverse skills, experience
andperspectives around the board table. With
the appointments of Fiona and Julie during the
year, our position has strengthened. The recent
external Board evaluation and results from
work commissioned on cognitive diversity
confirmed that we have well-rounded Board
skills and diverse thinking across the Board
andExCo. Whilst we are pleased with the
results and our progress to date in meeting the
diversity requirements of the FCA Listing rules
and Parker Review recommendations, we
acknowledge there is still more to be done
tocontinue to drive greater diversity. Our
challenge for the year ahead will be how
wecan enhance this at both Board and
ExColevels.
Finally, in September we announced that
RogerStott will retire from the Board at the
endof the year, after 16 years with AJBell, the
final three of which were served as COO. Roger
hasbeen an excellent thought leader and
ambassador and has played a significant role
inthe success of the business. I would like
toextend my gratitude to Roger for his
outstanding contribution to the Board and
Company overmany years, and especially
forhis support and guidance during my first
year as Chair. Wewish him all the very best for
the future.
Further details on Board changes can be
found in the Nomination Committee report
on pages 84 to 87.
Culture, purpose and
stakeholder engagement
The Board plays a crucial role in shaping and
embedding a strong and healthy culture by
endorsing the core values and principles of
theGroup. The Board receives updates and
feedback on staff engagement and regularly
reviews its culture dashboard to monitor how
we nurture our strong cohesive culture and
ensure it remains a real strength as we
continueto grow.
One of my priorities as Chair is to ensure
thatthe voice of our stakeholders is heard
andrepresented in Board discussions.
Wewelcomed the opportunity to engage
with our staff and shareholders in person
again this year, providing invaluable insight
into the operation and culture of our business.
Throughout this year our senior management
team and Board have connected with our
staff through various platforms including
hosting in-person and virtual leadership
sessions, participating in our annual
manager’s day, attending talent networking
events and regular employee surveys.
Positive, meaningful staff engagement is
keyto realising our strategic objectives and
soas the nominated Employee Engagement
Director I engaged with our Employee Voice
Forum (EVF) members during the year to
gather insights on a range of topics that
directly impact our company’s growth
anddirection.
Dividend
In line with our commitment to a progressive
dividend, the Board is pleased to announce a
final ordinary dividend of 8.25 pence per share,
reflecting the financial performance of the
business and strong capital position. The final
ordinary dividend will be paid, subject to
shareholder approval, at our AGM on 29
January 2025, to shareholders on the register
at the close of business on 10 January 2025.
This brings the total ordinary dividend for
thefinancial year to 12.50 pence per share,
representing an increase of 16% on the
previous year.
During the year the Board approved a new
capital allocation framework. This reaffirmed
our commitment to continue to invest in our
organic growth plans and pay a progressive
annual ordinary dividend. We have also
committed to reviewing our capital position
annually and will consider returning any
surplus funds to shareholders through a share
buyback or special dividend, in accordance
with our Capital Allocation Policy. The Board
ispleased to announce recent approval of
ourplan to return up to £30 million through a
share buyback programme in the upcoming
financial year.
Consideration of our wider stakeholders in
some of our key decisions in the year is
outlined in our Section 172 statement on
pages 26 and 27.
Looking ahead
AJBell is a financially strong business as
evidenced by a profitable, well-capitalised
andhighly cash-generative business model.
The business has a track record of delivering
growth and has a clear strategy to ensure
thatthis continues. Although we have seen
improvements in the macroeconomic
environment this year, geopolitical
uncertainties continue. The recent
Budgetannouncements, particularly
aroundincreases in capital gains tax and
bringing unspent pension assets under the
inheritance tax regime will also have an
impacton some of our customers. Whilst
these factors may present some challenges,
itis clear that the fundamental growth drivers
for the platform market remain firmly in place.
The Board remains confident in the long-term
prospects of the business.
I have thoroughly enjoyed being part
oftheteam and am hugely proud of our
achievements in 2024. On behalf of the Board
Iwould like to thank our management team
and all of our people for their hard work and
commitment this year and I look forward to
another successful year ahead.
Fiona Clutterbuck
Chair
4 December 2024
Alongside fellow Non-Executive Directors
(NED) and our CFO, Peter Birch, we discussed
hybrid working, our culture, and the future role
of artificial intelligence (AI) in supporting our
operations. These have been high-quality
debates and the forum has been invaluable
forfostering discussions and ideas. Ithas been
great to witness the high level of engagement
and the initiatives that have emerged from
these sessions.
This year we participated in the Great Place to
Work survey for the first time, having previously
used Best Companies to measure employee
engagement. We were delighted to receive a
score of 83% which places us amongst the
best large companies in the country.
We have maintained a high level of
engagement with existing and potential
shareholders this year and I have spent time
with our shareholders to hear their views. It
was important this year for us to engage with
our larger shareholders on proposed changes
to our Remuneration Policy. Our Chair of the
Remuneration Committee, Margaret Hassall,
led the consultation exercise which
demonstrated there is strong support for
theproposals that will be put to a vote at
ourAGM in January 2025.
Board changes and succession
As reported last year, we were pleased
towelcome Fiona Fry to the Board as
anindependent Non-Executive Director.
Following regulatory approval in March 2024,
Fiona was appointed Chair of the Risk &
Board priorities
Growth and efficiency
The business has delivered another
excellent set of results in 2024,
withimpressive growth in both our
customers and AUA. I fully recognise the
importance of sustaining strong growth
while also managing our cost base amid
an unpredictable macroeconomic and
political landscape. The Board’s focus in
the upcoming year will be on ensuring
ExCo strikes an appropriate balance
between growth and efficiency,
continuing to deliver our growth plans
whilst also realising operational gearing.
Consumer Duty
Good customer outcomes are at the
heart of everything we do, with good
value products, simple communications
and strong processes to support our
customers. Our Consumer Duty
implementation programme enabled
usto strengthen our foundations and
leverage new frameworks, tools and
processes to further enhance the
delivery of good consumer outcomes.
This year we completed our first annual
Consumer Duty assessment. Whilst we
are confident that we are operating in
line with the requirements of the Duty,
we recognise that embedding the Duty
is a journey and there are opportunities
to further enhance our business
processes and continue to improve
ourcustomer offering. The Board’s
focus will be on maintaining oversight
to ensure the business is delivering
good consumer outcomes for its
customers which are consistent
withthe Consumer Duty.
Executive succession
Succession planning for ExCo and
othersenior management has been a
key priority for FY24. A comprehensive
review took place during the year to
evaluate our overall talent pool within
the Company. It is gratifying to note the
number of internal candidates identified,
showcasing the effectiveness of
personal development and career
advancement at AJBell. We also
continue to evaluate the market to
identify external talent, ensuring a
diverse senior management team
inthefuture. The Board will maintain
oversight andchallenge the progress
ofour succession planning at ExCo
level, and we anticipate further
enhancements in the upcoming year.
Strategic report Governance Financial statements Other information
6 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 7
Chief Executive Officer’s review
Focused on
long-termgrowth
Our easy-to-use, low-cost platform
and market-leading customer service
place us at the forefront of the UK
investment platform market, ready to
capitalise on the significant long-term
growth opportunity.”
Michael Summersgill
Chief Executive Officer
Consistently strong growth
I am pleased to report on another excellent
year in which we have delivered strong
growth in customers and AUA. Our dual-
channel approach to the platform market
means we benefit from growth in both the
advised and D2C sub-sectors of the market.
This is set to continue, with approximately
two-thirds of the estimated £3 trillion total
addressable market still held off-platform.
We continue to increase our share of the
growing UK investment platform market,
both by attracting new customers entering
the market for the first time and by attracting
customers to AJBell from other platforms.
Over the past year we have reduced fees
forour customers, invested in our platform
propositions and sustained our multi-year
marketing campaign to increase brand
awareness. Together with our market-
leading customer service levels, these
factors have helped to drive our organic
growth this year and will further strengthen
our ability to capitalise on the significant
long-term growth opportunity that exists in
the platform market.
We have a track record of achieving
consistently strong growth in our
businesswhilst also increasing dividends
toshareholders. Our growth this year has
enabled us to deliver record financial results
and further increase the level of surplus
capital held. We are therefore pleased to
recommend an increase in our ordinary
ExCo. In addition, we recognise the
importance of having a robust and diverse
talent pipeline, and our commitment to
developing internal talent is demonstrated
byover 200 internal promotions this year.
Leadership team changes
Roger Stott will be retiring and stepping
downfrom his role as Chief Operating Officer
(COO), as planned, on 31 December 2024.
Throughout his 16-year tenure, Roger has
served in several senior positions and has
significantly contributed to our long-term
success. Roger has been a pleasure to work
with and I would like to thank him for his
contribution to the business and wish him all
the best in his retirement. His responsibilities
will be assumed by our CFO, Peter Birch, and
Chief Technology Officer (CTO), Mo Tagari.
Peter and Mo are excellent leaders who have
the skills and experience to ensure our focus on
operational delivery remains as sharp asever.
Following the year end, we announced
theappointment of Ryan Hughes to our
ExCo inthe role of Managing Director
ofAJBell Investments, a role he had held on
an interimbasis since October 2023. Ryan
excelled in his interim role and I look forward
to continuing our work together as we build
on the successes of our fast-growing AJBell
Investments business.
Campaigning for retail
investors
There are a number of ongoing legislative
andregulatory developments that will impact
customers in our market. We continue to
engage with the Government and regulators
on their behalf, campaigning for a range of
measures which we believe will help to foster
asupportive environment for long-term retail
investors in the UK.
dividend for the twentieth successive year,
alongside the initiation of a share buyback
programme to return up to £30 million of
surplus capital to shareholders.
Another record performance
Platform customers increased by 14% to
542,000 (FY23: 476,000), whilst platform
AUAincreased by 22% to £86.5 billion (FY23:
£70.9 billion), driven by strong net inflows
of£6.1 billion, up 45% versus the prior year
(FY23: £4.2 billion). This strong performance
was supported by the continued investment
in our platform propositions, pricing and
brand, alongside improved retail investor
confidence as markets rebounded and
inflationary pressures eased. The increase
inasset values across global equity markets
led to favourable market movements of
£9.5billion.
AJBell Investments AUM increased by 45%
to £6.8 billion (FY23: £4.7 billion). Our range
of simple, low-cost investment solutions
continues to perform exceptionally well,
including our managed portfolios, which
remain highly attractive to financial advisers
via both AJBell Investcentre and third-party
adviser platforms.
The growth in customers and AUA and the
improving macroeconomic environment
enabled us to deliver a record financial
performance. Revenue increased by 23% to
£269.4 million (FY23: £218.2 million), driven by
higher revenue from interest income, custody
fees and dealing fees. Profit before tax
The new Labour Government’s first Budget
proposed subjecting unused pensions on
death to inheritance tax (IHT) from April 2027.
Bringing pensions into IHT in the way
proposed is arguably the most complex and
costly way of raising tax from pensions on
death. As the proposals currently stand, they
will create delays for beneficiaries, will be costly
to administer and will prove unworkable in
many situations. We have proposed alternative
approaches directly to the Government that
would address these issues and we will
contribute to industry-wide efforts to agree
aworkable alternative.
The tax treatment of pension contributions
and pension commencement lump sums
arethe cornerstone of the UK pension
system.In the period leading up to the
Budget,speculation around the amendment
or withdrawal of these key incentives was
covered extensively by national media outlets.
This caused a meaningful change in customer
behaviour, with contributions into pensions
and withdrawals from them both increasing
significantly. Whilst neither aspect of pension
legislation was actually amended in the
Budget, customers were clearly concerned.
Pension saving is a long-term financial
decision and it requires a system in which
people have a high degree of confidence.
Wewill continue to make representations
tothe Treasury calling for a public
commitment to stability in the pension
taxsystem throughout this parliament.
Ourcampaign for a ‘Pensions Tax Lock’
hasbeen well received and we continue
tocallfor Government to use this ‘no-cost
option’ to ensure people saving for retirement
can have confidence inpensions.
AJBell has campaigned over a number
ofyears for simplification of the ISA system,
making it easier for people to invest, reducing
complexity in the savings and investment
system and breaking down barriers between
cash saving and investing. We are pleased
proposals for a UK ISA will not be taken
forward by this Government, with the
introduction of another type of ISA risking
undue product complexity with little benefit
tocustomers. The Government has instead
committed to simplifying the ISA system and
making it easier for people to benefit from
investing in ISAs and we look forward to
working with policymakers and industry
towards that objective.
The ongoing Advice Guidance Boundary
Review represents an opportunity for us to
provide greater support to our customers and
we are in favour of proposals to permit more
targeted support, as outlined by the FCA in
late2023. Feedback from the consultation on
those proposals was published in November
and we look forward to seeing them
implemented in due course.
Outlook
The structural growth drivers of the platform
market remain strong, as more individuals
recognise the importance of taking control
oftheir financial future.
We will continue to invest in our business
with a focus on our technology and brand in
order to capitalise on the significant growth
opportunity the platform market presents.
The benefits of operating our dual-
channelplatform,underpinned by a single
operating model, will continue to drive
operational gearing. Alongside this, we are
increasingly focused on creating efficiencies
through a framework of strong cost control
and the automation of processes.
Our diversified revenue model ensures
wecan deliver strong financial performance
across a wide range of economic conditions.
If the Bank of England’s base rate reduces in
line with current market expectations, this
hasthe potential to gradually increase the
attractiveness of investing, providing a
potential tailwind for customer acquisition
and inflows.
Pensions and ISAs are the core investment
products in the UK and rely on continued
belief from Government in the importance
oflong-term investing for individuals’
financialfutures. As with any new government,
changes in legislation can be expected. There
is a risk that some changes could reduce the
attractiveness of long-term investing in these
key products, or add complexity to the
industry and increase costs. However, we
remain confident that the new Government
will continue to support the key, long-standing
features of these products.
Finally, I would like to express my thanks to all
members of the AJBell team. Their ongoing
commitment and dedication continues to be
at the heart of our success and it is a pleasure
to work with them.
Michael Summersgill
Chief Executive Officer
4 December 2024
increased by 29% to £113.3 million (FY23: £87.7
million), driven by the increases in revenue and
higher profit margin resulting from our focus
on delivering operational gearing.
A highly engaged workforce
A strong, purpose-led culture and high
levelsof staff engagement are integral
toourcontinued growth and success.
Thisyearwe changed our employee
engagement survey to Great Place to Work,
awell-established employee engagement
tool with accreditations recognised globally,
as we wanted to continue to challenge
ourselves and gain a different perspective
onour workplace culture. We are therefore
pleased to report strong results, being
certified as a Great Place to Work with a
totalscore of 83%, well in excess of the 65%
accreditation threshold, placing us amongst
the best large companies in the country.
We continue to invest in our pay and
benefitspackage for employees. For FY24,
weincreased base pay by an average of 5%
and introduced uplifts to employer pension
contributions. Employee share ownership
remains fundamental to our business and
wecontinue to operate our annual free share
scheme award, which has resulted in 79% of
our workforce owning shares in the company.
We believe that having a diverse leadership
team is important to ensure that we bring
awealth of perspectives to the table, and I
ampleased with the strong levels of both
demographic and cognitive diversity in our
Our strategy to help
people invest
We invest in our propositions with
afocus on our three strategic drivers;
ease of use, trust and low-cost.
For progress against each strategic
driver, see pages 10 to 15.
Ease of use
Trust
Low-cost
Strategic report Governance Financial statements Other information
8 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 9
Chief Executive Officer’s review
Making investing easy...
We make it easy for customers to invest
through our full-service and simplified
propositions, supplemented by our in-house
investment solutions. Our range of solutions
provides our customers with a straightforward
investment journey, supported by additional
tools to make investing easier.
We are committed to continually investing in
our propositions with a focus on ease of use
to meet the evolving needs of customers and
advisers.
Adviser efficiency
On our full-service advised proposition,
AJBellInvestcentre, we have improved
efficiency and ease of use for advisers, helping
them to remain focused on delivering excellent
service to the customer.
We have developed a significantly improved
interface, mapped to the advice process, to
streamline the onboarding of new clients.
Fund-specific illustrations and pre-sale costs &
charges disclosures are produced instantly as
part of the process, with all progress visible to
the adviser on the onboarding dashboard.
We have also introduced a new feature
whichenables regular investments directly
intomodel portfolios. This allows advisers to
instruct the regular investments into a model
portfolio rather than individual asset lines,
again improving efficiency.
The development of AJBell Touch, our
simplified advised proposition, is ongoing.
Wecompleted beta testing during the year,
receiving some excellent feedback from
advisers. The fully digital solution will expand
our offering in the advised market. Through
itsstreamlined, intuitive user interfaces, AJBell
Touch is able to deliver greater efficiencies for
advisers, enabling them to engage with a wider
range of clients.
Improving and simplifying the
D2C customer experience
A proportion of our addressable market
sitsin legacy pension products. The vast
majority of people have multiple employers
during their career, and subsequently
accumulate several different pension pots
which can result in higher charges, whilst
also being more difficult to manage. Our
customers have been consolidating such
pensions with us for many years, but as
partof our focus on ease of use we have
launched our Ready-made pension service,
helping customers to consolidate their
existing pensions with minimal effort. The
combination of a pension-finding service,
anew pension product and a multi-asset
investment solution with an all-in cost of
just0.45% represents excellent value
forcustomers.
Customer experience is a key component of
ease of use, and as such we are undertaking
a project to roll out a new, fresh design for
our D2C website in early 2025. This will be
followed by the redesign of our mobile app.
These developments will focus on improving
navigation and enhancing content delivery
for customers, all centred on ease of use.
Long-term cash savings represent a
significant part of the addressable market
forplatforms. There are millions of people in
the UK who hold high levels of cash savings
for sustained periods of time, missing out
onthe superior returns that can be achieved
through risk-based investing. Many of these
consumers are deterred from investing due
to its perceived complexity and their own
lack of confidence. AJBell Dodl provides
anideal platform to address this market
opportunity, and to increase its
attractiveness to this cohort of customers,
we introduced a highly-competitive interest
rate for cash held in an ISA or Lifetime ISA,
with the current rate of 4.84% being higher
than the UK base rate of 4.75%. Customers
are able to access educational content on
the platform to help build their confidence
toinvest via AJBell Dodl’s streamlined
investment range.
…through our range of
platform propositions
Our full-service and simplified platform propositions, operating
in the advised and D2C market segments, ensure we are well
placed to support a wide range of investors with different levels
of investment experience and needs.
Our two established full-service products, AJBell Investcentre
and AJBell, offer a wide investment range through our
open-architecture platform.
AJBell Dodl, our simplified D2C proposition, broadens our
reach to a new generation of investors. It is aimed at less-
experienced investors, offering a simplified investment range
and is one of the best-value platforms in the market. AJBell
Touch, our simplified advised proposition, will enable advisers
to connect with their clients at the touch of a button, catering
for their needs through a fully digital service model.
What this means for our customers
On saving for her first house purchase, Becky said:
I chose AJBell in the first place because
I researched the easiest to use in terms
of first-time investors. I think it has met
those expectations for me. I find the
app really easy to use… it gives me all
the tools to be able to make a decision
on my funds. I like the fact I feel
empowered with my money.”
Becky
AJBell customer
Ease of use
We make it easy for
customers to invest…
Strategic report Governance Financial statements Other information
10 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 11
Chief Executive Officer’s review
Making investing easy...
Trust
Our award-winning platform propositions
and market-leading customer service levels
have enabled us to build a platform which
ishighly trusted by both customers and
financial advisers, evidenced by our
94.2%customer retention rate. This
trustedrelationship is key to retaining
existing customers.
Trust and brand awareness are also key
drivers of a new customer’s decision when
choosing an investment platform. Therefore,
alongside our highly trusted platform, we are
continuing to focus on enhancing our
brandawareness.
A scalable platform with market-
leading customer service
Our scalable platform offers a reliable digital
solution. During the year we processed in
excess of ten million trades and transactions,
highlighting our capacity to manage growing
demand and ensuring our customers can
invest whenever they choose.
While our digital services are at the core
ofour offering, we recognise there are
moments in the investment journey when
customers and advisers want to speak to
usdirectly. Our knowledgeable Customer
Services Team provide help and reassurance
by ensuring queries are resolved swiftly and
effectively. During the year we handled over
450,000 calls, with 97% of calls answered
within 20 seconds, highlighting our
commitment to providing exceptional
service.The strength of our service is
furtherdemonstrated by our market-leading
Trustpilot rating of 4.8-stars and being the
only platform to be recognised as a Which?
Recommended investment platform provider
for six years in a row.
We believe this is paramount to retaining the
trust of our customers and their advisers,
and to ensure we maintain our high
customer retention and referral rates.
We earn the trust of
our customers…
Increased brand awareness
We continued our multi-year strategy to
enhance brand awareness through our TV
advertising campaign and title partnership
with the AJBell Great Run Series. Our efforts
have yielded positive results, with prompted
brand awareness reaching an all-time high,
reinforcing our position as a trusted platform
in the market. We remain committed to this
strategy, and recently relaunched our TV and
radio advertising campaigns with refined
messaging to build on our improved
brandawareness.
…through our secure
and scalable platform
propositions
We administer over £90 billion of our customers’ investments.
During the year, we settled millions of trades and hundreds of
thousands of pension payments, demonstrating the robustness
of our technology model and its ability to allow our customers
to invest when they choose.
We continually invest in our platform to ensure a reliable
service for our customers. We conducted extensive disaster
recovery testing during the year, running the entire business for
a sustained period on the cloud, and continued to invest in
advanced cyber defence technologies to protect our
customers and platform, evolving in response to the changing
threat landscape. These investments ensure that our
customers can interact with our platform confidently. Further
details on how we ensure security across our platform can be
found on page 33.
We operate a hybrid technology
model, leveraging a blend of in-
house developed user interfaces
alongside hosting core back-office
systems supplied by industry-leading
software providers. This model
enables us to provide a robust and
stable platform with adaptable,
user-friendly interfaces, which is
critical to delivering positive
consumer outcomes.”
Mo Tagari
Chief Technology Officer
Strategic report Governance Financial statements Other information
12 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 13
Chief Executive Officer’s review
Making investing easy...
Our scale, combined with an efficient
dual-channel, single operating model,
enables us to keep costs low for our
customers. Our philosophy has always been
to share the benefits of operating at scale with
our customers so that we can provide one of
the most competitively priced platforms in
the market.
Reducing customer charges
During the year we have reduced
chargesonboth our advised and D2C
platform propositions.
For our advised customers, we reduced
custody charges for assets held on the
platform, as well as removing various
transactional charges.
For our D2C customers, we halved our
dealing charges on shares, ETFs, investment
trusts and bonds to £5.00 per trade, while
charges for frequent traders were reduced
from £4.95 to £3.50.
Competitive interest rates
We pay competitive interest rates to
customers on the instant access cash
balances held on our platform. Customers
often hold cash in their accounts temporarily
while they wait for investment opportunities.
This can differ for pensions, particularly
wherecustomers are approaching or are in
retirement, as they will often hold larger cash
balances to fund short-to-medium-term
income withdrawals. We have therefore
introduced new higher rates of interest on
cash held in pensions in drawdown.
These price reductions and increased
interestrates deliver annualised savings to our
customers of over £20 million. We believe
they will ensure that our pricing levels will
remain highly competitive and sustainable
over the medium term.
…through our in-house
investment solutions
Our multi-award winning investments business is delivering
onits commitment to offer a choice of simple, transparent
investment solutions at a low cost. Our multi-asset funds offer
a simplified pricing structure, with a single ongoing charges
figure (OCF) for our six growth funds at 0.31% per annum,
down by nearly half from 0.50% when they were first launched.
Following the year end, we also reduced the OCF on our two
income funds from 0.65% to 0.50%, further demonstrating our
commitment to delivering excellent value. For our advised
customers, we offer market-leading value on our managed
portfolio service (MPS) with a charge of just 0.15%.
We continue to deliver strong investment performance,
withallour multi-asset growth funds outperforming their
Investment Association sector average over both a three-
andfive-year period.
At AJBell Investments, our focus
isondelivering strong investment
performance via low-cost investment
solutions. We are seeing particularly
strong demand from financial adviser
firms, driving our total assets under
management to a record £6.8 billion.
Our philosophy has always been to
use our economies of scale to keep
charges low, whilst ensuring we
achieve competitive returns,
providingexcellent value for
moneyforourcustomers.”
Ryan Hughes
Managing Director,
AJBellInvestments
Low-cost
We offer great value
toourcustomers…
Strategic report Governance Financial statements Other information
14 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 15
UK platform market
£bn
2018 2020 2022 2024
1,073
860
729
634
+9%
CAGR
AJ Bell
platform AUA
86.5bn
Market overview
A significant growth
opportunity
The market opportunity
The UK investment platform market forms part of the broader
UK savings and investment industry
Across the industry, trillions of pounds of assets are held by individuals in products such as
pensions, ISAs, general investment accounts, bonds and cash savings with a significant
proportion held off-platform in legacy products offered by banks, building societies,
investment managers, pension schemes, stockbrokers and life insurance companies.
Investment platforms are increasingly attracting assets previously held in these legacy
products, driven by the improved customer outcomes they can deliver such as the
ability to manage investments easily in one place, increased flexibility and
investment choice, and often lower charges. As a result, there is an established
trend of non-platform assets gradually moving intothe platform market. This
trend is expected to continue.
A fast-growing UK platform market
The total addressable market for platforms is currently estimated to be
worth approximately£3trillion. With just over one-third of this currently
held on platforms, thereremains asignificant long-term growth
opportunity for investment platforms.
The platform market has grown from £0.6 trillion in 2018 to close
to£1.1trillion, witharound60% held on adviser platforms and the
remainder held on D2Cplatforms.Theadvisedand D2C segments
ofthe market have both grown atsimilarrates,drivenbylong-term
structural growth drivers and individuals taking greater personal
responsibility for their financial futures. AJBell is one of only a
fewplatformsoperating at scale in both the advised and D2C
marketsegments.
Total addressable market
Our dual-channel business model ensures that we are
positioned to capture assets from the whole addressable
market, irrespective of whether they are self-managed
orusingthe support of a financial adviser. This maximises
ouropportunity to capture an increasing share of the assets
flowing into the platform market, driving further market share
gains over the long term.
See our market overview for more information on page 18.
~£3tn
Demographics
The UK state pension
age will reach 67
by2028
There are over 31million members
of private-sector DC pensions in the
UK. The UK’s ageing population and
increased life expectancy have led
to an increase in state retirement
age, causing people wishing to retire
earlier to be increasingly reliant on
their private pensions and savings.
This is driving people to be more
actively engaged with their savings
and investments from an earlier age.
Government policy
The workplace pension
participation rate in the
UK has increased from
47% to 80% since 2012
There is an increasing requirement
for individuals to take greater
personal responsibility for their
retirement provision, evidenced
bythe UK Government’s policies
inrelation to pension freedoms,
auto-enrolment and tax-efficient
savings and investments.
Technology
Structural shift from
non-platform providers
to platforms
Technological innovation has made
the investment platform market more
accessible to a broader range of retail
investors who are increasingly looking
for simple, intuitive products to help
them achieve their long-term
financialgoals.
Long-term structural growth drivers
The long-term drivers that are shaping our industry and driving new growth opportunities.
What this means for AJ Bell
Our dual-channel model maximises our growth opportunity
~£1.9tn
~£1.1tn
Currently held
D2C Advised
AJ Bell’s market share
%
3.7
4.4
5.0
5.4
5.8
6.1
6.8
7.5
7.8
7.9
8.1
8.5
8.8
9.0
2018 2019 2020 2021 2022 2023 2024
Source: D2C market – Boring Money data as at 30 September, Advised market – LangCat data as at 30 September.
Strategic report Governance Financial statements Other information
AJ Bell plc Annual Report and Accounts 2024 1716 AJ Bell plc Annual Report and Accounts 2024
Market overview
Key trends in the investment
platform market
We respond to market trends that
have the potential to impact our
business, ensuring we remain
well-positioned to continue
capturinggrowth opportunities.
Link to strategy
Trust
Low-cost
Ease of use
How we are responding
Our low-cost, easy-to-use platform propositions serve the needs
ofboth advised and D2C investors. This dual-channel approach,
whichoffers excellent value to customers, positions us well to continue
delivering net AUA inflows across the platform. This was demonstrated
again in FY24 when we delivered over £6 billion of net inflows, with
both channels making strong contributions, and we expect to see
similar resilience in net flows in FY24 and beyond. Whilst there is
somepressure on new contributions, consolidation of existing wealth
continues to be a key driver of inflows to our platform. This has been
asignificant contributor to new business for many years as customers
and advisers consolidate pensions and other investments held across
multiple providers into one place. This activity is expected to continue
driving strong inflows and is not dependent on new contributions, so is
less impacted by the short-term market uncertainty.
Our open-architecture platform provides investment options across a
wide range of instruments and asset classes, including fixed income
instruments such as money market funds and gilts. Our Cash savings
hub also provides another option for our D2C customers who want to
earn highly-competitive interest rates on their cash from a range of
partner banks. During the year we also launched a market-leading
interest rate on AJBell Dodl investment ISAs and LISAs, as part of a new
drive to help cash savers earn interest whilst learning about investing.
The availability of these different options on our platform has enabled
us to meet the changing investment needs of our customers, and
helped to attract and retain assets that might otherwise have been
saved or invested in cash products outside the platform market.
Our diversified revenue model hasbenefited from higher interest rates,
driving improved revenue margins. We are committed to sharing
efficiency gains with our customers, people and shareholders.
How we are responding
We continually monitor the competitive landscape to ensure we keep
up with the pace of change and that our propositions remain at the
forefront of the market.
We are a trusted provider offering an easy-to-use platform, which offers
broad functionality and award-winning service at a highly competitive
price. This combination has driven strong growth in customers and
AUAover many years, and our scale ensures we have a profitable and
sustainable business model. The challenging market backdrop has made it
more difficult for newer entrants to achieve the scale necessary to achieve
profitability, and business models are under increasing pressure, evidenced
by reduced competitor recruitment and marketing activity.
By contrast, we have continued to perform strongly and increased
ourmarket share again in the year. From a position of financial strength,
weare investing in our brand, our propositions and our people to support
our long-term growth ambitions. Our combination of full-service and
simplified propositions, operating in both the advised and D2C markets,
gives us a strong competitive position relative to both incumbent platforms
and new entrants. This will help us to deliver further growth in customers
and AUA in FY25 and beyond.
Alongside the investment in our propositions, we have increased our brand
investment to improve the overall awareness of the AJBell brand with
potential customers. Our efforts have yielded positive results, with both
brand familiarity and prompted brand awareness reaching an all-time high.
We are committed to continuing our investment in brand in FY25. These
ongoing investments strengthen our competitive position and support our
ambition to continue capturing market share.
How we are responding
We continue to engage proactively with the Government and regulators,
campaigning on a range of measures which we believe will help promote
asupportive environment for long-term retail investors.
Pensions are the primary retirement savings vehicle in the UK and
customers are sensitive to changes in their tax treatment. We were pleased
to see the most fundamental incentives behind the pension tax system –
income tax relief on contributions and tax-free cash entitlements on
withdrawal – remain unchanged. Speculation around the future of these
incentives prompted an increase in both contributions and tax-free cash
withdrawals in the months leading up to the Budget. We will continue to
make representations to the Treasury calling for a public commitment to
stability in the pension tax system throughout this parliament.
Changes to inheritance tax may influence the financial planning
decisionsof some wealthier customers, for whom pensions may no longer
represent such an attractive estate planning vehicle. Financial advisers will
play a crucial role in supporting those individuals to adapt their portfolios.
Likewise, whilst the increases to capital gains tax will present a tax planning
challenge for some customers, we are well placed to support them
through tax-advantaged SIPPs and ISAs.
We continue to call for a simplification of the ISA system, making it easier
for people to invest, reducing complexity in the savings and investment
system and breaking down barriers between cash saving and investing.
Welook forward to working with policymakers towards this objective.
We are in favour of proposals to permit more targeted support to
D2Ccustomers, particularly those who are first-time or inexperienced
investors. Our simplified proposition, AJBell Dodl, is well-placed to
support these customers.
Higher interest rate environment
In recent years elevated inflation has led to higher interest rates
and rising costs for many households.
This has put pressure on individuals, presenting a headwind for
inflows into the platform market as people prioritise day-to-day
expenditure over their longer-term investments. Higher interest
rates have also impacted the platform market in different ways:
• Higher mortgage re-fix rates have affected people’s ability
tomake new contributions to their long-term investments.
• Higher returns on cash present a headwind for
investmentplatforms.
Changing competitor landscape
The platform market is an attractive market supported by
long-term structural growth drivers.
Leading platforms can attract and retain customers with high
lifetime values, driving significant recurring revenues. Serving
these customers via a scalable platform can deliver attractive
profit margins, once sufficient scale is reached.
These characteristics have attracted significant capital into
themarket, driving a continual evolution in the competitive
landscape. In recent years, several new competitors have
emerged, particularly in the D2C market, all addressing
themarket differently with innovative new propositions.
Intheadvised market we are seeing increased levels of
adviserconsolidation.
This has resulted in differentiated approaches acrossthemarket
to pricing models, service offering, functionality, customer
experience, and the level ofbrandand marketing activity.
Evolving legislative and regulatory
landscape
There are a number of ongoing legislative and regulatory
developments that will impact customers in our market.
The Labour Government’s first Budget included proposals to
introduce inheritance tax on unused pension assets and capital
gains tax rates were increased.
The Government has also committed to simplifying the ISA
system and making it easier for people to benefit from
investing in ISAs.
There is an ongoing review into the Advice Guidance
Boundary. This represents an opportunity for the D2C
platformto provide more targeted support for retail investors.
Link to strategy Link to strategy Link to strategy
Strategic report Governance Financial statements Other information
18 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 19
Business model
Delivering sustainable
value creation
Resources and inputs What we do How we do it Delivering value for...
Brand and reputation
With over 29 years of experience,
wehave built a trusted brand through
our high-quality service and platform
propositions. We raise brand awareness
through a combination of sponsorship,
PR, social media and referrals.
A well-invested technology
infrastructure
We operate a hybrid technology
model whereby our platform user
interfaces are developed in-house,
whilst our core back-office systems
are outsourced to industry expert
software providers. This model
provides a number of benefits,
including the ability to build adaptable,
easy-to-use interfaces and reduces
the cost of regulatory compliance.
People and culture
Our success is built on delivering a
high-quality service through the skills
and passion of our people.
Financial strength
We are a materially debt-free business
which holds sufficient funds to more
than meet our regulatory capital
requirements and support ongoing
investment in the business.
Our propositions
Our dual-channel model enables us to maximise the growth opportunity by increasing
market share in both the advised and D2C platform markets. Whatever the condition of the
day, people need to invest for the long term and that means our market is set to grow for
many years to come.
Our strategy
There are three strategic drivers that harness
whatwe deliver to customers and advisers and
howwedoit.
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Investment solutions
A range of in-house funds and MPS solutions which support our offerings
inboth the advised and D2C market segments
Ease of use
Trust
Low-cost
Our capital allocation priorities
As we grow and scale effectively, we will
continue to invest in strategic initiatives to
deliver long-term growth.
We aim to pay shareholders a progressive
ordinary dividend and will consider both
theappropriateness of, and mechanism for,
returning surplus capital to shareholders on
anannual basis.
Further detail on our capital allocation
framework is included on page 57.
Driven by our revenue model
Our revenue model includes a mix of fixed fees,
ad valorem and transactional charges which
provide a balance of inflation protection and
resilience in the face of economic and capital
market fluctuations. A significant portion of our
revenues are recurring, in the form of charges
levied on an annual or other recurring basis.
Our people
A positive and inclusive workplace with a strong, purpose-led culture.
A company that is committed to investing in the development of its staff
to help them fulfil their potential. A competitive pay and benefits package
that fairly rewards staff.
Staff engagement Staff promotions
203
Our shareholders
Sustained organic growth driven by our successful business model.
Strongfinancialperformancewhich funds further investment in the
business, whilst growing shareholder returns.
Total ordinary dividend
per share
12.5p
Announced share buyback
of up to
£30m
Our customers and their advisers
An easy-to-use investment platform that they can trust. It provides
helpfulcontent and knowledgeable customer support that enables them
tomanage their investments at a low cost, whether directly or with the
helpof a financial adviser.
Trustpilot score Customer retention rate
94.2%
See p16 See p28See p24 See p58 See p70
Market trends
and opportunities
Stakeholders Responsible business Risk management Governance
Underpinned by factors
that determine our
long-term growth:
Organic growth of our platform
AUA £bn
2020 2021 2022 2023 2024
49.7
65.3
64.1
70.9
86.5
Strategic report Governance Financial statements Other information
AJ Bell plc Annual Report and Accounts 2024 2120 AJ Bell plc Annual Report and Accounts 2024
Link to strategy
We invest in our propositions with a focus on
ourthreestrategic drivers: ease of use, trust and
low-cost. By focusing on continually providing
anexcellent standard of customer service,
straightforward investmentsolutions, and
competitively-priced platformpropositions,
ourcore drivers enable us toattract and retain
customers, increase AUA, and enhance customer
loyalty, all of which will drive stronglong-term
financial returns.
These are the primary KPIs which we use
tomeasure strategic progress. Our KPIs are
reviewed annually in relation to the strategic
objectives of the Company through our
businessplanning process.
Trust
Low-cost
Ease of use
Key performance indicators
How we
performed
We use selected key performance
indicators (KPIs) to monitor progress
against our strategy.
383
295
441
491
557
20212020 2022 2023 2024
Number of retail customers
000’s
+13%
Movement
2023 to 2024
Why it is important
The number of retail customers is the number that have
atleastone funded account with an AJBell product at
30September 2024.
The number of retail customers can be used as a measurement of
the success of our propositions, customer service and marketing.
145.8
126.7
163.8
218.2
269.4
20212020 2022 2023 2024
Revenue
£m
+23%
Movement
2023 to 2024
Why it is important
Our revenue is the total income generated by the Group’s
activities, comprising recurring ad valorem, recurring fixed and
transactional revenue.
Revenue provides a measurement of the financial growth of
the Group.
10.67
9.47
11.35
16.53
20.34
Diluted EPS
pence
+23%
Movement
2023 to 2024
Why this is important
Diluted EPS represents profit after tax divided by the weighted
average number of shares and unexercised options in issue
during the period.
EPS provides a measurement of profit per share to determine
the value created for shareholders.
72.8
56.5
69.2
76.1
92.2
20212020 2022 2023 2024
AUA
1
£bn
+21%
Movement
2023 to 2024
Why it is important
AUA is the value of assets for which AJBell provides either
anadministrative, custodial or transactional service.
AUA is a measurement of the growth of the business and is
theprimary driver of ad valorem revenue, which is the largest
component of Group revenue.
95.0
95.5
95.5
95.2
94.2
20212020 2022 2023 2024
Customer retention rate
ppts
(1.0)
ppts
Movement
2023 to 2024
Why it is important
The customer retention rate is the average number of funded
platform customers during the financial year that remain
funded at 30 September 2024.
Customer retention is a measurement of customer satisfaction.
37.8
38.4
35.6
40.2
42.0
20212020 2022 2023 2024
PBT margin
%
+1.8
ppts
Movement
2023 to 2024
Why it is important
PBT margin is calculated as PBT divided by total revenue.
PBT margin is a measurement of the efficiency of the Group’s
business model in converting revenue into profits.
22.2
23.9
22.6
29.8
31.6
20212020 2022 2023 2024
Revenue per £AUA
1
bps
+1.8 bps
Movement
2023 to 2024
Why it is important
Revenue per £AUA is the total revenue generated during the
year expressed as a percentage of the average AUA in the year.
Revenue per £AUA provides a simple measurement to facilitate
comparison of our charges with our competitors.
55.1
48.6
58.4
87.7
113.3
20212020 2022 2023 2024
PBT
£m
+29%
Movement
2023 to 2024
Why it is important
PBT is the profit generated by the Group before corporation
tax is paid.
PBT is a measurement of the financial performance of the
Group. Profits can be used to strengthen the capital base,
invest within the business or be returned to investors.
83
2024
Great Place to Work survey score
%
Why it is important
The Great Place to Work survey provides employers
with honest, in-depth feedback from employees
covering a range of matters such as leadership,
wellbeing, pay and more. The index survey score
reflects an overall score across all focus areas, with
an index score of over 65% required to receive
certification.
This is our first year using the Great Place to Work
Survey and as such no prior period comparators
are available. Under the previous Best Companies
survey, we achieved the maximum 3-star rating
for six consecutive years.
Key
Included directly as Remuneration metric
Included indirectly in Remuneration metrics
Financial KPI
Non-financial KPI
1. These KPIs are alternative performance measures (APMs). APMs are not defined
byInternational Financial Reporting Standards (IFRS) and should be considered
together with the Group’s IFRS measurements of performance. We believe APMs
assist in providing greater insight into the underlying performance of the Group and
enhance comparability of information between reporting periods. For definitions,
see page 174.
Strategic report Governance Financial statements Other information
AJ Bell plc Annual Report and Accounts 2024 2322 AJ Bell plc Annual Report and Accounts 2024
Stakeholder engagement
Building positive engagement
with our stakeholders
Our customers and
their advisers
Our shareholdersOur people Other stakeholders
Our customers include retail investors, financial
advisers and wealth management companies.
Our success is dependent on our ability to
understand our customers’ needs and develop
appropriate products to meet those needs.
Material interests
An investment platform for our customers and advisers that:
• is secure, reliable, and easy-to-use;
• provides a high-quality customer service at low cost; and
• helps them meet their long-term financial objectives.
How we engaged
Customer services and websites
We have ongoing customer and adviser engagement through calls,
meetings, organised events, newsletters, ourwebsite and other
written communications.
We continually invest in our propositions with a focus on ease of
use, informed by customer and adviser feedback. Ourproposition
websites provide our customers and their advisers with a range of
tools to assist them in managing theirinvestments.
Surveys
Customer and adviser surveys are conducted on an annual basis
with the results reviewed at Board level. Specific user groups
perform beta-testing to provide further insight and feedback. This
engagement and feedback informs the way in which we can best
serve our customers and their advisers.
Outcomes
• Hosted a range of events for advisers including our flagship
Investival conference and a wide range of seminars.
• Excellent customer retention rate of 94.2% and Trustpilot score
of 4.8-stars.
• Completed beta testing for AJBell Touch, our simplified
mobile-led proposition for advisers.
• Developed our Advised and D2C propositions with a focus on
ease of use, including a new Investcentre client onboarding
journey and our Ready-made pension for D2C customers.
• Reduced charges on both our advised and D2C platform
propositions.
Our shareholders include both institutional
andretail investors, including AJ Bell customers
and employees.
Delivering on our long-term strategic objectives
is dependent on our shareholders’ support.
Material interests
Our shareholders want to invest in a business that:
• delivers on its investment case; and
• provides consistent profitability, growth, and long-term
sustainable returns.
How we engaged
Ongoing investor relations programme
Through our investor relations programme, which includes regular
trading updates, management roadshows, investor and analyst
meetings, attendance at investor conferences, and our AGM which all
members of the Board attend, we ensure that shareholder views are
brought into the boardroom and considered in our decision making.
The CEO and CFO, supported by the Investor Relations Director,
met with analysts and investors throughout the year.
Our Remuneration Committee Chair, Margaret Hassall, also
consulted with shareholders on proposed changes to Directors’
remuneration and Non-Executive Director fees.
Corporate broker updates
Our corporate brokers and sell-side analysts also provide us with
valuable feedback and market insight. Our corporate brokers deliver
updates on market dynamics and representatives are regularly
invited to attend Board meetings.
Outcomes
• Regular financial reporting, with interim and full year results
published, along with quarterly trading updates and market
announcements.
• 16% increase in our total ordinary dividend.
• Approval of share buyback programme to return up to £30
million of surplus capital to shareholders.
• All resolutions passed at the AGM with a majority of more
than96%.
Our people are at the heart of our success.
Oursuccess is built on delivering a high-quality
service through the skills and passion of our
people who bring our values to life across
thebusiness.
Material interests
A working environment for our people that:
• facilitates their engagement at all levels;
• provides them with development opportunities;
• promotes their physical and mental wellbeing;
• promotes diversity and inclusion;
• rewards them appropriately; and
• encourages flexible working practices.
How we engaged
Surveys, staff communications and feedback
We engage regularly with our staff through the appraisal process,
our intranet site, Company presentations, leadership lunches and
our wellbeing programme. Our CEO hosted staff question and
answer sessions in our offices and provides regular email updates
on the business performance.
We changed our annual employee engagement survey to Great
Places to Work this year, to challenge ourselves to gain a different
perspective on our workplace culture.
Fiona Clutterbuck is our Non-Executive Director responsible for
employee engagement. The Employee Voice Forum, which she
chairs, meets to discuss a variety of themes raised by staff, with
recent topics including staff retention and hybrid working.
Company share schemes
We continue to encourage employee share ownership through our
BAYE scheme and free share scheme for all employees, to engage
our workforce in the performance of the Company and to align
employee and shareholder interests.
Outcomes
• Achieved accreditation as a ‘Great Place to Work’.
• Improvements to our staff pay and benefits package.
• Continued to offer BAYE and free share scheme to all staff.
• An intake of 26 new apprentices into the AJBell Academy
intheyear.
• Our staff achieved over 200 internal promotions and completed
over 100 courses and qualifications in the year.
Other stakeholders represent the local
communities in which we operate, as well as
the wider environment, our suppliers and our
regulators. As a socially responsible business,
we believe we have a responsibility to our local
communities, wider society and our suppliers.
We operate in a highly-regulated environment
and engage with our regulators constructively.
Material interests
Our other stakeholders want us to:
• act as a responsible corporate citizen in all respects; and
• conduct our business with integrity.
How we engaged
Engaging with our suppliers
We maintain and develop our business relationships. In addition to
ourdue diligence processes, we ensure management has regular
feedback sessions with representatives from key suppliers. We ensure
our payment terms are fair and in compliance with payment practices.
Engaging with our regulators
Led by our Compliance Team, we regularly engage with the FCA
and DWP on consultation papers and industry issues. We actively
seek to lobby via public consultation and with policymakers where
we perceive unfairness or unnecessary complexity.
Engaging with our communities and wider society
We continue to support the AJ Bell Futures Foundation, which
develops long-term partnerships in our local communities. We have
committed to donate 0.5% of our profits to the Foundation each
year. Alongside our financial donations, we have also seen our staff
participating in volunteering activities with our principal partner
charities: Smart Works, IntoUniversity, Stop.Breathe.Think and the
British Heart Foundation.
Outcomes
• 30-day payment terms.
• £438,500 of charitable donations.
• 328 hours of staff volunteering.
• Donation of 263 laptops and desktops to local primary schools
and community organisations.
• Completed our first annual Consumer Duty assessment which
confirmed our products provide fair value to customers.
We believe effective stakeholder engagement is a key element in
driving a successful, sustainable business, built for the long term.
We proactively engage with and listen to ourstakeholders to
understand what is important to them. By understanding our
stakeholders, we can factor into boardroom discussions the potential
impact of our decisions on each stakeholder group and consider
their needs and interests.
The information below sets out who our key stakeholders are, the key
reasons weengage with them, the areas they have a material interest
in and asummary of how we engaged in the year when considering
what ismost likely to promote the success of the Company.
Strategic report Governance Financial statements Other information
24 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 25
Section 172 statement
For the benefit
ofourstakeholders
Section 172 of the Companies Act 2006 (s172) requires
Directors to act in the way they consider, in good faith,
would be most likely to promote the success of the
Company for the benefit of its shareholders as a whole
and, in doing so, have regard (amongst other matters) to:
a) the likely consequences of any decisions in the
longterm;
b) the interests of the Company’s employees;
c) the need to foster the Company’s business
relationships with suppliers, customers and others;
d) the impact of the Company’s operations on the
community and environment;
e) the desirability of the Company maintaining a
reputation for high standards of business conduct;
and
f) the need to act fairly between shareholders and
theCompany.
We set out some examples of how the Board has
hadregard to the duties under s172 when considering
specific matters, and how it has considered the interests
of our key stakeholders in those decisions. Further detail
on how the Board operates, including the matters it
discussed and debated in the year, having regard to its
s172 duties, are contained within the Corporate
Governance report on pages 74 to 83.
The Board seeks to understand and carefully consider each
of our key stakeholders’ interests, priorities and views. The
Board recognises that each decision will have adifferent
impact and relevance to each key stakeholder, and so
having a good understanding of their priorities is important.
Where stakeholder priorities conflict, the members of the
Board exercise independent judgement when balancing
those competing interests in order to determine what it
considers to be the most likely outcome to promote the
long-term sustainable success of the Company.
Although the Board engages directly with some
stakeholders, engagement also takes place at different
levels within the business. The output from engagement
below Board level is reported back to the Board and / or
Board Committees and helps to inform both Board and
other business-level decisions.
Further information about how we engage with
ourstakeholders and their needs can be found
onpages24 and 25.
Principal decisions:
1. Capital allocation framework
During the year, the Board approved a new capital allocation
framework. In approving the framework, the Board considered
the need to establish a more holistic approach to capital
allocation than in our previously stated dividend policy and the
benefits of greater flexibility to manage the Group’s capital
through investment in the business and the return of surplus
capital to shareholders.
The framework strikes a balance between capital returns and
sustainable long-term value creation, enabling targeted
organic investment in the business to support our customers
and drive long-term business growth, whilst reinforcing our
commitment to a progressive annual ordinary dividend and
increasing the flexibility in which surplus capital is returned to
shareholders. The Board believes this balance will enable us to
maximise value for shareholders and ensure that we remain
attractive to both growth and income investors. This will also
impact the majority of our employees with 79% of the
workforce having share interests in the Group.
The framework also sets out the Board’s commitment to
continue to maintain a robust level of capital and liquidity,
asrequired by our regulator, and retains our long-standing
commitment to supporting our local communities with 0.5% of
PBT to be donated annually to the AJ Bell Futures Foundation.
In accordance with the new framework, the Board is pleased to
recommend a final ordinary dividend of 8.25 pence per share and
the approval of up to £30 million of share buybacks to be
completed during FY25.
Section 172 duties; a), b), c), d), e), f)
2. Consumer Duty annual assessment
In July 2023, AJBell successfully implemented the FCA’s Consumer
Duty requirements and the Board considered this to be in alignment
with the overall strategy and purpose of the business on the basis
that the delivery of good customer outcomes is fundamental
totheCompany’s purpose, business model, strategy and
guidingprinciples.
Whilst the Board was confident when it approved the initial
implementation in 2023 that the business was structured to
deliver good customer outcomes, the Board was keen to review
the FCA’s feedback post-implementation to consider if further
enhancements could be made.
In addition to considering post-implementation comments from
the FCA, the Board is also responsible for approving an annual
Customer Duty report, which is a confirmation of the Group’s
compliance with its Consumer Duty obligations and an assurance
that its business strategy aligns with the Consumer Duty principles.
Since implementing the Consumer Duty programme in July 2023,
the focus has been on moving the delivery of the Consumer Duty
into business-as-usual (‘BAU’) processes. In order to facilitate the
move to BAU processes, the Board agreed to refresh the Product
Governance Framework, which applies to all stages of a product
lifecycle and aims to provide a transparent, consistent and
auditable framework that demonstrates how we ensure regulatory
requirements are met and deliver good customer outcomes.
Inparticular, the refresh involved revising when key documents
prepared in accordance with the framework, such as the Fair Value
Assessments and Product Proposition Documents, would be
submitted to the Board for review and approval.
As a consequence of Simon Turner stepping down from the Board
in March 2024, the Board needed to consider the reassignment of
the role of Consumer Duty Board champion. Upon review and
consideration, it was decided that this should be reassigned to
Margaret Hassall. In the fulfilment of her role, Margaret was heavily
involved in providing the initial review and challenge before papers
were submitted to the Board for review.
In accordance with FCA guidance released in February 2024, the
Board was keen to use data to identify, monitor and confirm its
satisfaction with customers’ outcomes and their alignment with
the Consumer Duty. As a consequence, in approving the report,
the Board took into account, amongst other things, the results of
ongoing customer outcomes monitoring undertaken by Product
teams to assess whether products and services are delivering
expected outcomes in line with Consumer Duty, the results of
product reviews, customer research, surveys and Fair Value
Assessments. The reporting process also included reporting from
the second- and third-line functions to support the activities
carried out by the first-line teams.
This work culminated in the Board reviewing and approving
theGroup’s first annual Consumer Duty Report which covered
theperiod 1 August 2023 to 31 March 2024. In approving the
report, the Board is satisfied that the Consumer Duty is being
implemented and embedded across the organisation, and that
thebusiness was structured to deliver good customer outcomes.
In addition, the Board is satisfied that the Group’s future business
strategy is consistent with the requirements of Consumer Duty.
Section 172 duties; a), c), e), f)
Key milestones in the Board’s oversight of Consumer Duty post-implementation activity
Further detail on our capital allocation
frameworkis included onpage 57.
January 2024
Review and approval of enhanced
product governance framework
April 2024
Review, challenge and approval of the
template for the Consumer Duty report
July 2024
Review and approval of Consumer
Duty report covering the period
1August 2023 to 31 March 2024
March 2024
Reassignment of the Consumer Duty
Champion role to Margaret Hassall
May 2024
Review and challenge of the methodology
for preparing the report and related second
and third line assurance activities at R&CC
Strategic report Governance Financial statements Other information
26 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 27
Responsible business
Growing our business
responsibly
ESG is embedded in our business strategy,
ensuring that we continue to grow our
business responsibly. Being principled and
acting with integrity are at the heart of the
AJBell Way, reinforcing a culture with
responsible decision making at its core.”
Peter Birch
Chief Financial Officer
Making an impact
We are driven by our purpose – to help people
invest – and our product propositions help to
address the growing societal need for
individuals to take personal responsibility for
their financial futures by enabling people to
take control of their own investments.
During the year we have continued to
ensurethat ESG is embedded in our business
strategy with a focus on our four responsible
business pillars.
We continue to make investing accessible
forour customers and this year launched
theReady-made pension, a product which
provides a solution to millions of people who
have lost pensions, consolidating them
through one of our low-cost investment
solutions. You can read more about our
responsible propositions on pages 31 to 33.
We have made considerable progress in
improving diversity within the workforce.
OurBoard is now 50% women, and our
latestGender Pay report highlights continued
improvement in our mean and median gender
pay and bonus gaps, positioning us well
amongst peers in the platform sector. We were
also pleased to be certified as a Great Place to
Work in our first year completing the employee
engagement survey. You can read more about
progress we are making as a responsible
employer on pages 34 to 38.
The AJBell Futures Foundation launched last
year and is having a great impact in our local
communities. We donate 0.5% of PBT to the
foundation annually, supporting initiatives that
improve education, social mobility and overall
wellbeing. More information is provided on
pages 39 to 41.
We seek to minimise our impact on the
environment and as such we have set
near-term carbon reduction targets and
further developed our operational net zero
roadmap during the year. See pages 42 to 45
for more detail. We are pleased by the progress
we continue to make in these areas whilst
acknowledging the need for continuous
development.
We administer over £90 billion
of assets forourcustomers’
financial futures.
In the year our customers withdrew over
£1.5billion of pension funds for their
retirement and just under 2,000 customers
used their Lifetime ISAs towards purchasing a
first home.
1. The use by AJBell plc of any MSCI ESG Research LLC orits affiliates (‘MSCI’) data, and the use of MSCI logos, trademarks, service marks or index names herein, donotconstitute a sponsorship,
endorsement, recommendation, or promotion ofAJBell plc by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty.
MSCI names and logos are trademarksor service marks of MSCI.
1
1. See page 174 for definitions of the UN SDG targets.
We are creating sustainable value
Responsible
propositions
Offering products and
servicesthatarealigned
with our purpose.
See p31
Our contribution to the United Nations Sustainable Development Goals (UN SDGs)
We have identified five key targets which we have mapped to our responsible business strategy
1
.
Board of AJBell plc
The Board is the decision-making body relating to ESG matters, taking ultimate responsibility and providing oversight
ofmanagementactions. The Board receives an annual update on our responsible business strategy.
Responsible
employer
Developing and supporting
our people to help them
achieve their potential.
See p34
Supporting our
localcommunities
Playing a positive and
supportiverole in our
localcommunities.
See p39
Environmental
awareness
Minimising our impact
onthe environment.
See p42
How we govern our responsible business strategy
Audit
Committee
The Committee is
responsible for reviewing
ESG-related financial
information and
disclosures.
Risk & Compliance
Committee
The Committee is
responsible for ensuring
ESG-related risks are
effectively embedded in
risk management
frameworks and risk
reporting.
Remuneration
Committee
The Committee oversees
that remuneration policy
and practices are designed
to support our strategy
and promote long-term
sustainable success.
ESG
Forum
The NED forum performs
reviews and deep dives
intospecific ESG topics.
The forum provides
recommendations to the
Board.
Executive responsibility
The CFO has the delegated authority from the Board to manage our responsible business strategy and is accountable
foritsdelivery. Executive Committee members are allocated specific ESG-related objectives in their business areas,
alignedtoourstrategy.
ESG working group
Our cross-functional ESG working group is responsible for the co-ordination of day-to-day activities, ensuring we deliver on our
objectives, and for the consolidation of our responsible business approach. ESG-related information is reviewed by the working
group before being presented to the Board, its sub-committees or the NED ESG Forum.
Our approach
We behave in a responsible manner with a
focus on our propositions, our people, our
communities and the environment. We believe
this is important for the long-term
sustainability of our business.
The Board is responsible for the conduct of
AJBell’s business and the development of its
strategy, as well as promoting the long-term
sustainable success of the business. This
includes both how we embed our approach
tobehaving responsibly across the business
and promote a healthy corporate culture. The
Board provides oversight and has elected Peter
Birch, Chief Financial Officer, as the Executive
Director responsible for our approach to
responsible business.
Individual objectives have been assigned
toExecutive Committee members and a
cross-functional ESG working group exists
forthe co-ordination of day-to-day activities.
This structure allows us to fully embed ESG
across our existing business strategy. Our
Non-Executive Director (NED) ESG Forum
enables the Board to provide more focused
input into specific areas.
In 2024, the Board received an annual ESG
update. Details of the oversight provided by
theBoard sub-committees are disclosed in the
Governance section of this Annual Report.
3.8 5.5 10.24.4 13.2
Strategic report Governance Financial statements Other information
28 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 29
Responsible business
Materiality approach to ESG
In order to remain successful in the long
term, an understanding of our most material
ESG topics is essential to inform company
strategy, targets and reporting.
We have taken a financial materiality
approach to our assessment, considering
thefactors which may generate risks
oropportunities that have a significant
influence on future cash flows. In doing
sowe considered the International
Sustainability Standards Board’s (ISSB) IFRS
Sustainability Disclosure Standards, which
the UK Government has confirmed its
We report our approach to offering
responsible propositions in three strands:
accessibility, product offering, and
customersecurity.
• Accessible solutions
We believe in making investing accessible.
Our low-cost, easy-to-use propositions
cater for a broad range of investors. We
produce content to educate more people
about investing.
• Product offering
Our high-quality propositions offer
products with a long-term focus. We
provide solutions to facilitate sustainable
investing and are responsible stewards of
the investments we manage on our
customers’ behalf.
• Customer security
We protect our customers’ data through
robust information security control. We
campaign on behalf of our customers
where we see unfairness and over
complex regulations.
Accessible solutions
Making investment easier
At AJBell, we believe in making investing
accessible, whether investing directly or with
the help of a financial adviser. Our aim is to
help our customers to achieve their financial
goals and promote a better understanding
andawareness of investment choices that
ultimately deliver good outcomes for
ourcustomers, aligned with the FCA’s
ConsumerDuty. We recently launched the
Ready-made pension, a product which offers a
free pension finding service to track customers’
lost pensions and consolidate them into one
pot, which is then automatically invested into
the customer’s chosen fund from the range
ofour low-cost investment solutions.
intention to adopt as part of the UK
Sustainability Reporting Standards.
We identified 13 ESG factors of material
importance to our business, with reference
to Sustainability Accounting Standards Board
(SASB), our MSCI ESG rating factors and
investor feedback. We then assessed each
area by potential impact on the Group’s cash
flow before any mitigating actions. Tohelp
inform our assessment, we sought feedback
from our investors on which ESG factors
they consider most important.
To ensure we are regularly reporting on the
most relevant ESG issues, we review our
materiality assessment each year. After a
review in the year, we have identified
systemic risk management and corporate
governance as two factors with a higher
potential impact on the Group.
This assessment highlights that having
responsible propositions, effective governance,
and being a responsible employer are our
most material areas of ESG. Inrelationto
environmental factors, the nature of our
business model means that our impact is
relatively low, but it is important for us to
ensure that customers have accurate and
complete information to use in making
investment decisions.
We provide educational investment content
to our customers and their advisers through
our weekly Shares magazine, podcasts, online
resources and adviser events, providing
market information and expert analysis to
support our customers in navigating their
investment decisions. The ‘learn to invest’
section of our D2C site provides customers
with a wide range of resources from investing
essentials to in-depth guides. In July, we
introduced a highly-competitive cash interest
rate for AJBell Dodl ISAs and LISAs, giving
customers the chance to earn interest whilst
they build the confidence to begin investing in
the product’s streamlined offering of
investment funds and shares.
AJBell Dodl broadens our reach to a new
generation of investors across the D2C
segment. It is a commission-free service,
aimed at less-experienced investors and is
amongst the best-value investment platforms
on the market. AJBell Touch is a mobile-
focused platform service that will broaden
ouroffering to financial advisers and help
themserve a wider base of clients through
adigital service model.
As part of our purpose to make investing easier,
we introduced a package of price reductions
across our platform in April. On our advised
platform, we removed both the SIPP in-specie
transfer-in charge and the charge relating
toconversion of a SIPP into a Retirement
Investment Account. We also reduced annual
custody fees for advisers investing via the
Funds & Shares Service (F&SS). On the D2C
platform, we reduced the costs of dealing
charges on shares, ETFs, investment trusts
andbonds from £9.95 to £5.00 per trade,
while charges for frequent traders have been
reduced from £4.95 to £3.50. Alongside this,
we also increased the interest rates paid out to
customers on their cash balances held on the
platform, including higher rates of interest on
cash held in pension drawdown.
Medium High
Alignment to
responsible business
Corporate governance
Having an effective system of rules, practices and processes by which a company is
directed and controlled.
Systemic risk management
Managing the risks arising from large-scale weakening or collapse of operational
systems upon which the business depends.
RP
Data privacy and security
Addressing the management of risks related to the collection, retention, and use of
sensitive, confidential user data and the resilience of IT infrastructure to cyber-attacks.
RP
Employee engagement, health and wellbeing
Ensuring our employees are paid fairly, engaged at all levels and the provision of
ahealthy and safe working environment including support of their physical and
emotional wellbeing.
RE
Talent development
Ensuring the Group has the ability to attract new people as well as retain and develop
a highly-skilled workforce.
RE
Transparent customer information
Providing adequate and clear information about our products and services to support
our customers in navigating their investment decisions.
RP
Corporate behaviour
Overseeing and managing business ethics issues such as fraud, corruption, executive
misconduct and negligence.
Diversity and inclusion
Ensuring our culture, hiring and promotion practices embrace the building of a diverse
and inclusive workforce throughout the organisation, that reflects both the local
communities in which we operate and our customer base.
RE
Responsible investment
Integrating environmental, social and governance considerations into the management of
our investment products and the investments we offer on our platform, and the provision
of data and content to support customers in making responsible investment decisions.
RP
Social advocacy
Includes lobbying efforts with public policy makers and investment in initiatives
toadvance societal issues, such as reducing the gender investment gap.
RP
SC
Operational emissions
Minimising our operational carbon footprint. This includes both direct emissions and
indirect emissions in our value chain.
EA
Local communities
Supporting the economic development of our community and preserving the local
environments in which we operate.
SC
Financed emissions
Minimising the carbon footprint associated with our AJBell Investments’ funds
andManaged Portfolio Service.
EA
Environment
Social
Governance
RP
Responsible propositions
RE
Responsible employer
SC
Supporting our local communities
EA
Environmental awareness
Material topics and potential impact on our business
The chart below outlines the inherent potential impact on the Group’s cash flow before any mitigating actions.
Responsible propositions
Our focus on helping people to invest
guidesour product philosophy: ensuring
weoffer accessible investing solutions
designed to help our customers to
achievetheir long-term financial goals.
Strategy
We offer products and services
aligned to our core purpose – to help
people invest. We do this in a way that
helps our customers to achieve their
financial goals, whether self-directed
or with the support of an adviser. We
also provide options for customers to
invest responsibly on our platform and
are responsible stewards of the
investments we manage on our
customers’ behalf.
Why it is important
Our aim is to make investing
easier and empower people to
invest for their financial futures.
In fulfilling our role in society,
itis pivotal that we offer
propositions which enable
more people to invest.
Who it impacts
Customers and their advisers,
wider society, shareholders.
2024 highlights
• Launch of the Ready-
madepension.
• Introduction of new pricing
structure, with reduced
charges and higher rates
ofinterest paid to our
customers.
• Retained our 4.8-star
Trustpilot customer rating.
UN SDG targets
4.4 13.25.5
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30 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 31
Responsible business
Product offering
Our platform product philosophy
We provide mainstream products that we
believe will help our customers manage their
investments for the long term.
Our core products are SIPPs, ISAs and
Dealing / General Investment Accounts.
SIPPs and ISAs enable customers to invest
for the long term in a government-approved,
tax-advantageous way and we also offer
variations of these products, such as the
Lifetime ISA and junior products, ensuring
that we cater for a wide range of customer
requirements.
We offer an open-architecture platform with
investment solutions from market-leading
providers and our own AJBell Funds and
MPS, which cater for a wide range of risk
appetites. Through our products, customers
can buy, sell and hold a broad range of
investments including shares, collective
investments and other instruments traded on
the major stock exchanges around the world.
Our research shows that,
onaverage,women in the UK
have lessthan half the level of
savings andinvestments than
men do, equatingto an estimated
£1.65 trilliongender investment gap.
We are seeking to help change this
through AJBell Money Matters, which
aims to empower women with the
confidence and knowledge to start
theirinvesting journey.
The initiative continues to publish
biweekly podcasts and articles,
supported by dedicated social media
channels, strategic partnerships and
both internal and external events.
FY24 has seen a 240% increase in
email subscribers, a 16% increase in
podcast downloads and a 68% YOY
uplift in website views.
Further information on all our articles,
podcasts, reports and events can be
found at ajbellmoneymatters.co.uk.
A series of exclusions removes
companiesfrom certain industries,
suchastobacco, controversial weapons,
andadultentertainment. Then, a ‘best-in-
class’ ranking system means that, for the
remaining companies, ESG credentials are
factored into relative index weights,
alongside market capitalisation.
Customer protection
Information security
We hold significant amounts of data
relatingto our customers, products, and
business. We recognise that protecting
thisinformation is critical to the success
ofour business and the safeguarding of
ourcustomers. We adopt the principle of
‘defence in depth’ to provide multiple layers
of protection for critical information and
systems. This ensures that there are multiple
controls and processes, ensuring protection
is both robust and resilient. Our security
processes are aligned with industry best
practice including ISO 27001 and the US
National Institute of Standards and
Technology Cyber Security Framework.
Information and cyber security threats are
continually evolving. To enable our security
teams to stay up to date, we leverage
external threat intelligence to understand
who might be targeting the Company and
our customers. This capability assesses the
techniques and tactics used by attackers and
helps ensure our controls are appropriate.
We combine this capability with regular
collaboration and sharing with industry
groups and regulators to understand the
threats across the sector. To ensure our
security teams’ skills remain current with
attacker techniques, we invest in regular
training and development for staff, working
towards industry-recognised qualifications.
We recognise that technology-enabled crime
can happen at any time of day and as such
operate 24/7 monitoring, provided by a
Security Operations Centre. This capability
monitors our systems and controls for any
anomalies or alerts and ensures they are
immediately investigated by security experts.
Our products and platforms have security
‘baked in’ by virtue of a Secure Software
Development Lifecycle. This ensures that
security is considered as part of every stage
oftechnology deployment, from procurement
and design through to implementation and
maintenance. Our systems are regularly tested
by accredited third-party ethical hackers who
undertake penetration testing exercises to
ensure our systems are resistant to attack.
Wehave conducted disaster recovery
exercises utilising cloud technology, enhancing
our operational resiliency. This, combined with
a process of continuous review and testing,
ensures that our controls are always
improvingto enhance the security of
ourcritical systems and data.
Integration of ESG into our
investment management
AJBell Investments invests across multiple
asset classes and implements its investment
strategy predominately through a universe of
mutual fund instruments that are either
actively or passively managed.
The investment policy statements that
govern all our discretionary mandates
contain a dedicated section detailing how,
and the extent to which, stewardship and
ESG considerations should be factored
intoour investment management activities.
Thisallows us to deliver for our customers
byacting as responsible stewards of the
investments that we manage on their behalf.
As outlined within our Voting & Stewardship
Policy, we only select products from
investment firms that are themselves
signatories to the UK Stewardship Code or
can provide a strong explanation as to why
they do not comply. Fundamentally we are
looking for alignment with the UK
We recognise that our staff are our most
valuable asset when it comes to protecting
critical information and systems. All staff
undergo security training, and we provide
regular advice and guidance to staff via all
staff updates and intranet blogs. Regular
phishing testing is conducted to ensure our
staff not only know how to identify an attack,
but also respond in a timely and effective
manner. A positive security culture is
encouraged from the top of the organisation,
starting with the Board, to every member of
staff. We encourage open and active dialogue
with security from all areas of the business
toensure our controls remain effective
andenhance the safety of our customers
anddata.
Campaigning on behalf of retail
investors
We actively seek to lobby the Government
and regulators via public consultation and
with policymakers where we see unfairness
or unnecessary complexity. Our focus is
always on campaigning for simplicity and
good customer outcomes.
We have long campaigned for ISA
simplification and during the year have
beensuccessful in our campaign against the
introduction of the ‘UK ISA’ proposed in the
March Budget statement, with plans for its
introduction now scrapped under the new
Government. We continue to campaign for
further simplification of the ISA landscape,
both with the Government and regulator, and
believe that the focus should be on combining
the best features of the current framework into
a single ‘One ISA’ product. This would prevent
customers becoming overwhelmed by choice
and make investing easier.
We continue to work with the Treasury and
FCA on their joint review of the boundary
between advice and guidance. We feel there
is a great opportunity for our platform to
provide a far greater level of useful guidance
to millions of people who are unlikely to ever
accumulate sufficient wealth for an
independent financial adviser.
More recently, ahead of the Autumn Budget,
we called for a ‘Pension Tax Lock’ to prevent
the kind of damaging uncertainty and
speculation over pension contributions and
withdrawals observed across the industry in
recent months.
Although we were pleased core features
ofthe pension tax system remained
unchanged in the latest Budget, we will
continue to make representations to the new
Government calling for public commitment
to stability in the pension tax system.
Stewardship Code’s Principle 1: that the
manager’s “…purpose, investment beliefs,
strategy, and culture enable stewardship that
creates long-term value for clients and
beneficiaries leading to sustainable benefits
for the economy, the environment and
society.” Additionally, we monitor whether a
manager is a signatory to the UN Principles of
Responsible Investment (PRI), the principles of
which incorporate the integration of ESG
issues within the analysis and decision-
making process in addition to the active
engagement and voting.
For the AJBell Responsible Screened Growth
Fund and AJBell Responsible MPS range, we
operate within a consistent framework to
ensure that ESG principles are being
considered within the investment process.
Where possible, we invest in ETFs that track
an MSCI Socially Responsible Index (SRI),
which include a wide range of values-based
screens and exclusions. This ensures that we
target our investment in companies with
higher ESG rankings, whilst seeking to
minimise ESG controversy.
Tax strategy
We are committed to responsible tax
management through a strong risk
culture, robust governance, and clearly
defined processes and controls.
Oversight of tax-related risks is
embedded in the Group’s governance
framework, with the Audit Committee
taking responsibility for the internal
control systems that identify and
monitor these risks. Our processes are
designed to ensure the accuracy and
integrity of the Group’s tax filings,
minimising the potential for errors.
These controls are subject to regular
review, monitoring, and testing to
ensure ongoing compliance and
effectiveness in managing our
taxobligations.
At AJBell, we recognise the role that
tax plays in supporting wider society,
contributing to the funding of public
services and infrastructure that benefit
communities and the economy.
Weare committed to fulfilling our tax
obligations responsibly, ensuring that
we pay the right amount of tax at the
right time.
Our corporation tax and employer’s
National Insurance paid in respect of
the year ended 30 September 2024
was £38.3 million (FY23: £24.9 million).
Alongside this, we contribute to other
taxes such as VAT and stamp duty.
Our full tax strategy is available at:
ajbell.co.uk/group/tax-strategy
Sustainability ratings
Customers can view and filter by
Morningstar’s Sustainability Rating
when researching funds, ETFs and
investment trusts on our platform.
This rating enables investors to
evaluate funds based on the
sustainability profile of their
underlying holdings.
Facilitating responsible
investment
We help our customers undertake
responsible investing through our
investment options, data and content.
As an execution-only investment
platform, we provide customers
withaccess to a diverse range of
investment options that allows
themto diversify and respond to
ESG-related risks.
AJBell Responsible
Screened Growth Fund
We offer a well-diversified fund
favouring companies with strong
ESG credentials. The Fund provides
a low-cost, easy-to-understand
responsible investing option for
both our advised and D2C
customers.
Responsible investing
guide
Customers can access a free guide
to responsible investing via the
‘learn to invest’ section of our
website, providing an overview of
responsible investment strategies.
Favourite funds filter
Customers can filter our ‘Favourite
funds’ list to view funds which have
a focus on responsible investment
or sustainability.
Sustainable fund labels
Customers can access UK
Sustainability Disclosure
Requirements (SDR) fund labels
and disclosures, where produced
by product providers.
Responsible Managed
Portfolio Service
This provides financial advisers witha
highly-competitive ESG solution for
their clients. We offer sixresponsible
portfolios, offering varying degrees
of risk for customers who want to
achieve long-term capital growth
through ethical investing.
We also offer customers, and potential
customers, valuable insights to relevant
market information, showcasing our
dedication to achieving positive customer
outcomes and strengthening our reputation
as a trusted brand. Our press coverage over
the Budget was a huge success, beating all
of our competitors on the number of articles
we were featured in on Budget day when it
came to national consumer press. We made
nine press releases on the day of the Budget
and had a number of our staff providing
coverage across TV and radio outlets,
providing analysis on the impact of the
policy changes announced. To date, nearly
40,000 people have read our article on
‘Everything you need to know about the
Budget’. Alongside this, we had the biggest
day for podcast downloads for our Budget
special, which hit the top 10 in the Business
charts on Apple after its release.
Strategic report Governance Financial statements Other information
32 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 33
Responsible business
Our guiding principles are critical to all parts
of the business, from how we recruit to the
way we set our objectives. They help drive
our behaviours and decisions and remind us
that customers are at the heart of everything
we do.
All staff are encouraged to use the principles to
guide them on how to make decisions and
how to conduct themselves. In this way, we
will ensure a strong, cohesive, and inclusive
company culture where everyone embraces
the same core set of values.
Employee engagement
Having used the Best Companies annual
engagement survey for over ten years we
changed to Great Place to Work (GPTW) this
year, a globally-recognised engagement
survey which has provided us with valuable
insights into how our employees feel about
working at AJBell.
We are proud to report strong results, having
been certified as a Great Place to Work with
atotal score of 83%, significantly exceeding
the 65% accreditation threshold and
positioning us among the top large
companies in the country.
Our highest scoring focus area in the survey
was ‘Justice’, which is the extent to which
employees perceive that management
promote inclusive behaviour, avoids
discrimination and is committed to
hearingfair appeals.
Employee wellbeing is measured using
theGPTW Wellbeing Index, which assesses
factors such as work-life balance, job
fulfilment, and interpersonal relationships.
Weachieved an overall wellbeing score of
75%,with 90% of staff feeling that people care
about each other, and 98% agreeing they can
be themselves at work.
We are pleased with our strong results,
which demonstrate that we continue to
havea supportive workplace culture, which
helps attract and retain talent, and enhances
our reputation as a responsible employer.
Werecognise the importance of a highly-
engaged workforce and look to continually
evolve our approach.
Responsible employer
Maintaining a strong, purpose-led
cultureiskey to our ongoing success.
Theunderlying values of our business are
setout in our guiding principles, which
inform everything we do.
Strategy
We will develop and support our
people to help them achieve their
potential. We will strive to ensure our
staff are actively engaged. Our strong
employer brand and culture will
enable us to attract and retain a
diverse and talented workforce.
Why it is important
Our success is built on
delivering a high-quality service
through the skills and passion
of our people, who bring our
values to life across the
business.
Who it impacts
Customers and their advisers,
employees, shareholders.
2024 highlights
• Certified as a Great Place
toWork.
• Improved the diversity of
our senior management.
UN SDG targets
3.8 5.5 10.24.4
Our pay and benefits package
We offer a comprehensive pay and
benefitspackage and have made further
enhancements to this at the start of FY24,
including an average 5% pay increase and
higher pension contributions. For FY25,
wehave provided a further uplift to pension
contributions as well as enhancing our
FamilyWay initiatives to offer paid time off for
employees undergoing fertility treatment.
Share ownership is fundamental to who
weare as a business and is a great way to
reward our loyal staff for continuing to
provide a high-quality service to our
customers and their advisers, which is critical
for the long-term sustainable success of the
business. We are delighted that 79% of our
people owned shares or share options in
AJBell as at 30 September 2024 (75% as at
30September 2023), with a third of our staff
actively contributing to our BAYE scheme and
the second award of our annual free share
scheme for all staff made in January 2024.
We remain committed to our hybrid
workingmodel, offering staff a blend of
office and home working. Central to this
approach is the importance we place on
staying connected with colleagues and
building strong relationships. As such, we
recognise our offices are the ‘beating heart’
of our business, where our culture lives
andbreathes.
Employee Voice Forum
Positive, meaningful staff engagement
iskeyto realising our strategic objectives.
Oneof the ways we do this is through
theEmployee Voice Forum (EVF) which is
chaired by Fiona Clutterbuck, our nominated
employee engagement Board director.
Comprised of staff representatives from
across the business, the EVF is responsible
for collecting ideas and suggestions from
employees on various topics to ensure their
voices are heard and considered in the
Board’s decision-making process.
During FY24, Fiona and the EVF met to
review feedback from staff on a variety
oftopics including our employee value
proposition, pay and career progression,
andthe role of AI in the workplace.
Staff events
Social events form an important part of
ourculture. We offer our people a calendar
of wide-ranging events across our three
offices, delivered by our in-house events
team, including our annual Christmas and
summer parties. In December nearly 800
people gathered to enjoy our Christmas
party, with other social events across the
year including our monthly staff socials,
ourvery first AJBell Dragon Boat event
andexclusive cinema screenings.
Internal events
A key part of our approach to staff
engagement is to ensure senior leaders are
visible across the business and accessible to
staff delivering our business objectives. We aim
to ensure staff are aware of the key aspects
ofour business strategy and understand their
role in delivering it, which is vital to maintain
astrong purpose-led culture across
thebusiness.
As a result, we deliver a range of internal
communication channels. This includes
videointerviews with senior leaders in the
business and a programme ofmonthly
leadership breakfast and lunch sessions,
which provide the opportunity for members
of the leadership team to engage informally
with staff whilst providing insight into their
focus areas.
Talent management
The quality of our people and building
arobust and diverse talent pipeline for the
future is essential to delivering our long-term
growth strategy. Our aim, therefore, is to
attract and retain talent across the business
and provide them with opportunities for
personal growth that will help us to deliver
our goals and them to fulfil their potential.
Following our Ofsted ‘outstanding’ rating in
2023, our Talent Development Programme
has continued to grow with 18 new learners
enrolled this year. 100% of those who
completed a course in 2024 achieved a
distinction, with many going on to receive
promotions to senior roles.
The Talent Development Programme
helpsindividuals on their leadership
andmanagement journey, from ‘Activate’
forindividuals at the start of their career
journey and ‘Accelerate’ for individuals to
takethe nextstep into management. It
enables those successfully completing the
programme toobtain an industry-recognised
qualification from the Chartered Management
Institute (CMI).
We added a new ‘Advance’ programme to
our Talent Development Programme this
year, for those ready to take the next big step
of their leadership career, including our next
generation of Heads of Departments.
A big part of our culture at AJBell is the
support and emphasis we place on personal
growth and career progression. We love to
see staff grow their careers with us, so we are
proud that last year over 200 staff successfully
secured an internal promotion.
Apprenticeships
In FY24 we welcomed 26 new apprentices
tothe AJBell Academy, selected from over
2,200 applicants, bringing the total number
of apprentices being supported via the
Academy to 88 during the last year.
Of the group, 19 joined us on the
InvestmentOperations Specialist
apprenticeship programme. These learners
have the opportunity to work within our
Customer Services, Operations and Business
Development departments over their
two-year programme. As well as gaining an
understanding of the business and their roles
they will be working towards their Level 4
Apprenticeship and a Chartered Institute of
Securities and Investments qualification.
We continue to work with Manchester
Metropolitan University with seven
apprentices joining their Digital and
Technology Solutions degree apprenticeship.
All are studying for a BSc and undertaking
specialisms in Software Engineering,
ITConsultancy and Data Analysis.
Our apprentices enjoyed great success this
year and we celebrated our 2020 cohort of
digital apprentices as they graduated from
Manchester Metropolitan University.
Our guiding principles
Principled
We act with integrity
Knowledgeable
We know our stuff
Straightforward
We simplify the complex
Personal
We put people first
Ambitious
We set high standards
Strategic report Governance Financial statements Other information
34 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 35
Diversity and inclusion
At AJBell, we value diversity and a culture
that attracts, values and retains people from
all backgrounds, regardless of age, caring
responsibilities, disability, ethnicity, gender,
religion or sexual orientation. We strive to
promote an inclusive workforce where our
people feel valued, respected as individuals,
and empowered to succeed in their chosen
career path.
Our commitment to diversity and inclusion
isa continuous process and our framework
aims to help us better understand diversity
inthe context of our business and the
widerindustry.
Our D&I Framework is aligned with
theAJBellWay and supports the FCA’s
wideraimin ensuring UK financial services’
firms meet the diverse needs of their
customers. Research demonstrates a strong
link between diversity and inclusion and
positive outcomes in workplace culture,
continuous innovation, effective risk
management, and good conduct.
Demographic diversity
At AJBell, we are committed to fostering
adiverse and inclusive workforce where
everyindividual feels valued and empowered
to thrive. Our focus in 2024 has been on
enhancing the gender and ethnic diversity
within our senior management team,
buildingon the already diverse nature
ofourwider workforce, which closely
mirrorsthe society we serve.
We have set a number of five-year desired
outcomes and interim milestones to measure
progress against this target.
This year, we made further strides in
meetingthe FCA’s gender and ethnic
diversityrequirements, having welcomed
Fiona Fry and Julie Chakraverty to the Board
asNon-Executive Directors. With these
appointments, we now have five women
onour Board, and both our Chair and Senior
Independent Director are women. Additionally,
we are pleased that our Board now includes
ethnically-diverse representation.
Our latest Gender Pay Report highlights
ourongoing commitment to promoting
gender balance. We are encouraged by
thecontinued improvement in our mean
and median gender pay and bonus gaps,
positioning us well amongst peers in the
platform sector. We remain confident that
men and women at AJBell are paid equally
for equivalent roles, and we are dedicated to
maintaining this standard as we support the
progression of women into senior positions.
Our approach to diversity and inclusion
extends to gender-inclusive recruitment
practices and talent development initiatives,
through which we seek to actively address
traditional gender imbalances in technical
roles. From our digital and investment
apprenticeship programmes to our succession
planning for senior roles, we are continuously
evolving our recruitment strategy to ensure
arobust and diverse talent pipeline for
thefuture.
At AJBell, we understand that diversity is not a
one-time initiative but a continuous process.
By aligning our efforts with our Guiding
Principles, which shape our culture, we will
continue to attract, develop, and retain talent
from all backgrounds, ensuring an inclusive
and equitable workplace for everyone.
Diversity initiatives
This year we were awards finalists in
recognition of our approach to, and progress
with, diversity within the business at the
PIMFA 2024 D&I Awards. The AJBell
Academy also won ‘Financial Services
Initiative of the Year’ at the British Training
Awards for contribution to diversity in
financial services.
During Pride month, we encouraged staff
toreflect on their own awareness of diversity
and inclusion, and the power of their influence
through allyship. To promote allyship across
AJBell we offered staff the opportunity to
takethree online learning sessions on being
anally, reinforcing the importance of a sense
of belonging.
As part of Learning at Work Week we
celebrated Global Accessibility Awareness Day,
helping our staff to better understand issues
around digital access and inclusion. We always
aim to remove barriers that might prevent
people from accessing our e-learning.
As part of Neurodiversity Celebration Week,
we shared a wealth of information to help
colleagues understand and support
neurodiversity at AJBell. We are proud to
have neurodivergent employees across all
departments of our business and we invited
them to share their lived experiences with
staff through a number of articles published
to our staff intranet.
Cognitive diversity
Our D&I framework also focuses on cognitive
diversity, the diversity of thought, with the aim
to maximise the benefits that a cognitively-
diverse leadership team brings. We believe
that diversity of thought can increase team
performance, bringing together different
perspectives to improve the way that
challenges and opportunities are addressed.
Our approach to cognitive diversity reflects
external research which suggests two
components that underpin the potential for
and realisation of diversity of thought:
• Group composition: the inherent
potential of individual group members to
think differently from each other, which
may be based on experiences, beliefs and
the way they prefer to address problems.
• Group culture: the attitudes, practices
and group dynamics that influence
whether individual group members are
open to unreservedly sharing their
thoughts and whether they actively
attend to the perspectives of others.
A cognitive diversity assessment for
boththeBoard and ExCo, using the
DiversityofThought (DOT) Scorecard were
updatedduring 2024 following changes
inmembership. The group score for both
committees is considered to be in the upper
20% of all groups tested by the vendor,
indicating we have strong cognitive diversity
in our leadership team and on the Board.
Inclusive practices and leadership
At AJBell, we are dedicated to creating a fair
and inclusive workplace that values diversity
and empowers every employee to thrive.
InFY24, we strengthened our focus on
inclusive practices by enhancing our talent
management, succession planning, and
leadership development initiatives.
We aim to build a diverse pool of candidates
for internal development programmes and
enhanced succession planning by identifying
diverse talent for senior roles, aligning with
our commitment to equitable representation.
AJBell’s dedication to diversity, equity, and
inclusion is embedded in our policies,
ensuring a fair and inclusive workplace
wherediscrimination and unequal
treatmentare not tolerated.
To support these efforts, all employees
receive comprehensive training on equality
and inclusion as part of their onboarding and
ongoing regular communications via The
Exchange, our internal communications
platform.
DE&I Ambassadors
A diverse workforce is a key factor in AJBell’s
success and, as part of our People Strategy,
we appointed designated Diversity, Equality
and Inclusion (DE&I) Ambassadors to actively
promote, support and develop our inclusive
workplace culture.
All staff were eligible to register their interest
and following a selection process, five staff
were recruited to serve as DE&I Ambassadors.
All the ambassadors are enthusiastic about
diversity, equality and inclusion and play an
important role in supporting and building the
Our framework
The framework centres around four key components, all of which contribute
toachieving those expectations:
Demographic diversity
Recognising and acknowledging
demographic diversity, to maximise
the benefits of a demographically
diverse workforce. Our objective is
to ensure AJBell’s workforce is
diverse and represents the society
it serves.
Inclusive practices
andpolicies
Ensuring we have fair policies andpractices in place that valueadiverse workforce,
and demonstrating inclusive behaviours from the top down to strengthen our
inclusive culture.
Cognitive diversity
Recognising and acknowledging
diversity of thought, to maximise
the benefits of a cognitively diverse
leadership team. Our objective is
toensure AJBell recognises,
encourages and acknowledges
diverse views and perspectives.
Our workforce as at 30 September 2024
Total number of employees 2024
1
1,460
2023: 1,373
1. Additional employee data is provided within note 7 which shows the average position during the year.
2. Other senior management is defined as an employee who has responsibility for planning, direction or
controlling the activities of the Group, or a strategically significant part of the Group, other than the
Board of Directors.
3. Ethnicity data has not been disclosed by 7% of employees.
4. Gender and ethnicity benchmark data is as per the UK (2021) census.
conversation about DE&I at AJBell. Since
being appointed, they have been working
with the HR Team to develop a plan for FY25.
Their main objectives are establishing allyship
in our workplace, raising awareness of DE&I
thorough employee engagement, and
enhancing our inclusive culture.
Inclusive leadership and
behaviours
We recognise the importance of
demonstrating inclusive behaviours from the
top down to strengthen our inclusive culture,
ensuring that senior management are strong
advocates of the framework. We delivered
in-house inclusive leadership training to all
managers and team leaders, equipping them
to lead by example in promoting inclusivity and
fairness. Through various staff events and
communications, we raised awareness and
understanding of diversity and inclusion,
embedding these values into our
dailyoperations.
Furthermore, we updated our core
competencies and behaviours framework
toreflect inclusive practices, ensuring that
performance reviews and development
plans at all levels are aligned with our
DE&Iobjectives.
At AJBell, we believe that inclusive
leadership and behaviours are essential
inbuilding a culture where everyone feels
valued and supported. Managers across the
business are responsible for ensuring that all
employees understand our commitment to
diversity and inclusion and are empowered
to contribute to an environment free from
discrimination, harassment, or inequality.
Whistleblowing
In maintaining a strong workplace
culture,we recognise the importance of
encouraging staff to disclose their concerns
about wrongdoing, or the covering up of
wrongdoing. Our whistleblowing framework
ensures that our people can confidentially or
anonymously raise concerns, and provides
access to an external whistleblowing service.
Any whistleblowing investigation is handled
independently and follows a strict process to
prevent victimisation and allow safeguards to
protect whistleblowers from retaliation or
being otherwise disadvantaged.
We also have a nominated Whistleblowing
Champion, a role currently occupied by
Eamonn Flanagan, our Non-Executive
Director and Chair of the Audit Committee.
More information on the governance
procedures in place around our
whistleblowing arrangements can
befoundon pages 75 and 96.
Gender Ethnicity
Men WhiteWomen All other ethnic groups
2023: (845) 62% / (528) 38% 2023: (1,036) 80% / (251) 20%
2023: (6) 67% / (3) 33% 2023: (9) 100% / (0) 0%
2023: 49% / 51% 2023: 81% / 19%
Total employees
3
Total employees
3
2023: (18) 78% / (5) 22% 2023: (19) 83% / (4) 17%
UK benchmark
4
UK benchmark
4
Other senior management
2
Other senior management
2
Board of Directors Board of Directors
(5) 50% (5) 50%
(1)
10%
(9) 90%
(17) 71% (7) 29% (18) 82% (4) 18%
(881) 60% (579) 40% (1,135) 81% (258) 19%
49% 51% 81% 19%
Inclusive leadership
andbehaviour
Responsible business
Strategic report Governance Financial statements Other information
36 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 37
Responsible business
At AJBell, we take pride in fostering strong
community ties and supporting initiatives
thatmake a meaningful impact to the lives
ofthose around us. We achieve this through
the work of the AJBell Futures Foundation,
for which we are the sole funder, and by
offering staff the opportunity for paid leave
tovolunteer their time, skills and experience
towards local causes.
AJBell Futures Foundation
The AJBell Futures Foundation was
established to create lasting, positive change
in communities by supporting initiatives that
improve education, social mobility, and
overall well-being.
The Foundation focuses on empowering
individuals, particularly young people, with
the skills and knowledge needed to build
brighter futures. Through partnerships with
charities, educational programmes, and
community projects, the AJBell Futures
Foundation seeks to address inequalities
andprovide opportunities for people facing
disadvantage to find a path to financial
security and invest in their futures.
We have committed to provide 0.5% of PBT
tothe Foundation annually, to be distributed
to selected charitable organisations that
empower people to take control of their
future, through initiatives focused on
self-advancement.
The trustees of the Charity include members
of the Executive Committee, as well as
employees who have been elected
followingan application process.
Principal charity partners
In 2024, the Futures Foundation has partnered
with four Principal Charity Partners: Smart
Works, IntoUniversity, Stop.Breathe.Think and
British Heart Foundation. Each of the partner
charities received donations ranging from
£100,000 to £190,000 in the year.
Supporting our local
communities
We strive to make a long-lasting and positive
impact by sharing our business success with
our local communities.
Strategy
We are active members of our local
communities. We are committed to
having a positive impact through
engagement and participation whilst
ensuring we operate in a fair and
transparent manner.
Why it is important
We have a strong social
conscience and are committed
to making a positive contribution
to the communities in which
weoperate.
Who it impacts
Local communities,
shareholders.
2024 highlights
• Partnered with four principal
charity partners through the
AJBell Futures Foundation.
• Raised £860k for our Great
Run Series title partner,
British Heart Foundation.
UN SDG targets
3.8 5.5 10.24.4
Promoting health and
wellbeing
We place a great deal of importance on the
health and wellbeing of our staff, investing in
a wide range of support that we continually
review. Our onsite gym at EQ4, equipped with
fantastic facilities, has dedicated in-house
personal trainers who share workouts, health
programmes and nutritional advice.
We appreciate that physical health is an
important part of our overall wellbeing.
Eachquarter we offer staff ‘advanced health
MOTs’ and massage therapy.
As title partner of the Great Run Series, we
were delighted to offer our staff free entry to
one of our AJBell Great Runs in 2024. It was
pleasing to see over 237 of our staff take part
in the Great Run events, which bring both
physical and mental wellbeing benefits.
We have a number of Wellbeing
Ambassadors across Manchester and
London who are trained in mental health
firstaid, to support colleagues that are
experiencing mental health issues. This is
further complemented by our Employee
Assistance Programme, which gives our
people access to independent confidential
advice and support should they need it.
We know that feeling good and staying
healthy in our daily lives make a big
difference to how likely we are to fall ill and
how fast we recover afterwards, so we offer
all staff a health cash plan, providing a range
of positive healthcare benefits such as cash
back to cover day-to-day costs such as
dental and optical bills, physiotherapy, virtual
GP consultations and consultancy charges.
Anti-bribery and corruption
statement
AJBell Group’s policy is to conduct
allour business in an honest and
ethical manner with zero tolerance for
bribery and corrupt activities. We are
committed to acting professionally,
fairly and with integrity in all business
dealings and relationships.
We aim to comply with all laws relating
to anti-bribery and corruption and are
bound by the laws of the UK, including
the Bribery Act 2010.
We provide training on this policy as
part of the induction process for all
newemployees.
Our zero-tolerance attitude will be
clearly communicated to all suppliers,
contractors, business partners and
external parties at the outset of our
business relationship with them and
asappropriate thereafter.
Human rights and modern
slavery statement
We have a zero-tolerance approach to
modern slavery and we are committed
to acting ethically and with integrity in
all our business dealings and
relationships.
This approach applies to our own
business, all persons working for us or
on our behalf in any capacity, and all
of our supply chains.
We implement and enforce effective
systems and controls to ensure
modern slavery is not taking place.
We provide mandatory training
foremployees with procurement
responsibilities, as well as those in our
HR and Risk departments, to ensure
they understand and can spot the
signsof modern slavery and human
trafficking. All other employees have
theopportunity to enrol on the
trainingvoluntarily.
Our recruitment policy includes
conducting eligibility to work checks
for all employees as a control against
human trafficking. The AJBell Group
Anti-Slavery Policy is referenced in our
employee handbook, which forms
part of our contract with staff, so the
policy is prominent and visible to
allstaff.
Smart Works
Smart Works aims to empower
womenwiththe confidence they need
to reach theirfull potential and secure
employment, byproviding interview
coaching and offering apersonal styling
session from donated professional
attire. As a result of our donations,
around 10,000 women were supported
nationwide during the year across
11Smart Works centres, an uplift on
thenumber of women supported in the
prior year by 40%. We are thrilled with
the involvement of our staff supporting
this charity as over 50 AJBell staff have
volunteered at 6 co-run events in
Manchester and London, in addition
tosupporting fundraising events such
asthe ‘Cycle for Smart Works’. We are
delighted that we have won the Spirit of
Manchester awards for the Partnership
and Collaboration category alongside
Smart Works Greater Manchester.
Strategic report Governance Financial statements Other information
38 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 39
Responsible business
Staff-nominated causes
Alongside these donations, the Foundation
awards approximately 10% of its annual
donations to discretionary causes and
charitable organisations nominated directly
by our employees. These can be wide ranging
in activity, from supporting local sports clubs
in disadvantaged areas to charities increasing
technological accessibility, all aligning with
the Foundation’s objective in helping people
build better futures. It has been pleasing to
see staff taking up this unique opportunity
and as a result over £31,000 has been
donated to staff-nominated causes.
Staff volunteering
We promote a culture that encourages
ourstaff to create lasting value in our
communities. Our employees have
consistently demonstrated their dedication
togiving back through volunteering and
charitable activities.
This year, we have continued our Christmas
toy appeal in partnership with Cash for Kids,
with staff donating toys and apprentices
helping to prepare donations for distribution to
local families in need. We also hosted a careers
workshop with The Talent Tap, offering mock
interviews and industry insights to help young
professionals, while our Digital Apprentices
provided insights into technical careers to
localprimary school students.
We are also dedicated to bridging the
digitaldivide in our community and this
yearwe donated 263 repurposed laptops
tolocal schools, groups, and organisations,
enhancing access to technology for those
who need it most.
University of Salford
Our collaboration with the University
ofSalford continues to grow, particularly
through two key initiatives. The Journalism
Award, funded by the AJBell Futures
Foundation, was established in memory
ofMark Gardner, a valued colleague who
played an important role as part of our Shares
Magazine in educating our customers. This
award supports undergraduate journalism
students by offering a cash prize and the
opportunity to have their work published in
Shares Magazine, providing aspiring writers
with a strong foundation as they embark on
their careers.
As part of our sponsorship of the ‘AJBell
Technology Awards’, which recognises
outstanding Computer Science students at
the University of Salford, winners receive a
cash prize to support their academic pursuits,
while reinforcing the importance of data
analytics and technological innovation in
today’s world. We are proud of our role in
nurturing talent and rewarding excellence in
our community.
Through these partnerships and initiatives,
AJBell remains committed to creating
opportunities, fostering talent, and giving
back to the communities we serve.
IntoUniversity
IntoUniversity (IU) helps young people
facing disadvantages achieve their
academic potential and pursue higher
education, thus breaking cycles of
poverty. IU opened a Salford-based
learning facility centre within three
miles of our Manchester office and
delivered the programmes supported
by our Future Pathways partnership to
over 26,000 young people nationwide
– 900 of which were fully funded
directly by our donation. It has been
great to see 60 AJBell staff supporting
the delivery of 14 educational,
career-focused workshops with IU,
delivered to over 300 students
acrossManchester, Bristol and London.
Furthermore, AJBell’s Learning and
Development Team has facilitated
thementoring of four IU managers,
providing an opportunity for reflection
through a mentoring relationship with
an experienced manager outside of
thecharity.
British Heart Foundation
In addition to working alongside British
Heart Foundation as the official charity
partner of the AJBell Great Run Series,
we felt BHF aligned perfectly with the
charitable objectives of the AJBell
Futures Foundation: to champion
thevital work they do to keep hearts
beating in communities across the UK.
In February, we supported BHF’s Heart
Month, with a pledge to donate £5 for
every person trained in potentially
lifesaving CPR, capped at £50,000.
Thegoal to train 10,000 people in CPR
through their digital app, RevivR, was
exceeded by more than double – with
over 20,000 trained during the month.
The AJBell Futures Foundation has
also pledged to fund the provision of
210 community defibrillators during
the two-year partnership, equipping
communities across the UK with
lifesaving equipment and skills.
Stop.Breathe.Think
Stop.Breathe.Think (SBT) is a virtual
mental health service, providing access
to free and confidential one-to-one
counselling sessions for children and
young people aged 8 to 21. Since
January 2024, SBT have partnered
with41 youth organisations to spread
awareness of their services, which
includes local schools and youth
projects. Donations from the
Foundation have directly funded 6 or
more 50-minute counselling sessions
for 325 children and young people,
freeof charge. SBT also delivered an
informative mental health workshop to
our staff team of mental health first
aiders, focusing on the topic of
improving resilience.
AJBell Great Run Series
In 2024, we embarked on our second year
as title sponsor of the AJBell Great Run
Series. The Great Runs are a renowned
series of running events across the UK that
have been instrumental in encouraging
people of all ages and abilities to embrace
an active lifestyle.
Through our partnership, AJBell has
supported a wide range of participants,
from experienced athletes to first-time
runners, fostering a sense of achievement
and personal growth while raising
awareness for important charitable
causes. In 2024, over 197,000 people
tookpart in the runs across the country,
from Birmingham, Bristol and Portsmouth,
to Glasgow, Newcastle and Manchester,
raising an estimated total of £25 million
fora wide range of charities.
Official charity partner
As title partner, we nominated British Heart
Foundation (BHF) to serve as the official
charity partner for the Great Run Series.
TheBHF’s mission is to fund groundbreaking
research into heart and circulatory diseases,
aiming to save lives and improve heart health
across the nation. The BHF’s purpose aligns
with the series’ focus on physical fitness and
cardiovascular health. This partnership
enables the charity to raise vital funds while
promoting heart-healthy habits.
Through this partnership with BHF, nearly
£860,000 was raised by participants across
the run series in 2024, all of which will help to
fund their lifesaving research.
Together, AJBell, the Great Run Series, and
British Heart Foundation are committed in
creating a positive social impact by working
towards healthier communities.
Total people taking part in the
runs across the country
197,000
Money raised for good causes
(Estimated)
£25,000,000
Strategic report Governance Financial statements Other information
40 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 41
Responsible business
Taking action
In our commitment to sustainability, this year
we have focused on developing a detailed
netzero transition plan over our operational
emissions and are pleased to have established
near-term operational carbon reduction
targets, aligned to the principles of the
Science-Based Targets initiative (SBTi),
demonstrating our dedication to meaningful
climate action. Alongside this, we continue
toneutralise our Scope 1 and 2 emissions,
achieving carbon neutral status for the fifth
consecutive year.
We continue to operate sustainable travel
initiatives for all employees, including a public
transport season ticket loan scheme up to
£6,000 and a bike loan scheme up to £2,000.
We also use 100% renewable electricity
across all our offices and implement a
responsible waste strategy, which includes
refurbishment and donation of old laptops to
local community organisations and ensuring
none of the waste from our Manchester
headoffice goes to landfill. These efforts
reflect our ongoing pledge to minimise our
environmental footprint while promoting
responsible, sustainable practices throughout
our operations.
In relation to our execution-only platform,
our role is restricted to making different
investment options and information available
to customers, with the ultimate decision on
responsible investing being in the hands of
the customer. For our AJBell Funds and MPS
portfolios, our role is similarly to respond to
customer appetite, whilst providing the option
for them to prioritise responsible investing.
Operational net zero
We are committed to playing our part in the
UK Government’s commitment to be net zero
by 2050. During the year, we have undertaken
several projects aimed at developing a detailed
operational net zero transition plan and
assessing feasibility of our proposed carbon
reduction targets. We have highlighted those
significant projects in the following sections.
Net zero definition
In developing our transition plan to
net zero, we have interpreted the
meaning of net zero to be aligned with
that of the definition provided by the
SBTi’s Net Zero Standard: “Reducing
emissions by at least 90% and
neutralising any residual GHG
emissions on an ongoing basis.”
Increasing our office energy
efficiency
Our Manchester head office is the primary
contributor to our total Scope 1 and 2
emissions and therefore has been a key focus
area in our transition planning. During the year
we have undertaken an energy efficiency
assessment at our head office to understand
existing performance and identify a baseline
for modelling future improvements. We then
developed a five-year strategy for the building,
which included a programme of technically
and commercially considered energy
conservation measures that would enable us
to achieve our carbon reduction targets.
As well as this, the asset improvement plan
ensures we maintain compliance with the
proposed changes to the Minimum Energy
Environmental awareness
At AJBell, we recognise the importance of
societal action to reduce global emissions
and are committed to playing our part.
Strategy
We seek to minimise waste and our
impact on the environment. We assess
the impact that climate change could
have on our business and respond to
those risks and opportunities.
Why it is important
We understand the importance
of collective action in achieving
global net zero and are
dedicated to doing our part.
Who it impacts
Customers and their advisers,
wider society, shareholders.
2024 highlights
• Implemented 100%
renewable electricity tariffs
across all our offices.
• Committed to near-term net
zero-aligned operational
carbon reduction targets.
UN SDG targets
13.2
Efficiency Standard (MEES), which will require
commercial properties to achieve an EPC
rating of at least ‘C’ by 2028, increasing to
a‘B’in 2030.
We agreed a new lease for our London base
during the year, moving into the recently
refurbished Blue Fin building. There is a
landlord-led decarbonisation project in
progress for the building, with an action plan
in place to achieve an EPC ‘A’ rating by 2027.
Blue Fin already operates a number of
environmental initiatives aligned with our
carbon reduction plans, such as LED lighting
installation in all common areas, a recycling
strategy which diverts 100% of waste from
landfill and a sustainable travel plan which
facilitates the use of public transport.
We are pleased to announce that all our offices
now use traceable electricity that is 100%
generated from renewable sources, backed by
the Renewable Energy Guarantees of Origin
(REGO) certification. This has been the driving
factor behind our 32% reduction in Scope 1
and 2 emissions since the baseline year.
By making this investment in our offices
AJBell is well-positioned to contribute to
asustainable future and support global
netzero aspirations.
Reducing our supply chain
emissions
With the majority of our total greenhouse
gasemissions attributed to spend within our
supply chain in our baseline year, engagement
with our value chain is crucial to achieving our
carbon reduction goals.
During the year, a cross-functional
initiativewas established to implement our
firstprinciples-based sustainable procurement
policy. The policy has been distributed to
buyers within the business to help guide
themin making more sustainable
purchasingdecisions.
In assessing the feasibility of our proposed
Scope 3 carbon reduction targets, we
contacted our top suppliers by spend with
sustainability questionnaires. We received
over 50 responses, a response rate of 83%,
with information received on current supplier
emissions data and insights into our suppliers’
carbon reduction plans. Among the suppliers
from whom we collected data, 65% had
already established their own carbon
reduction targets, with additional suppliers
expressing intentions to do so.
Going forwards, as part of a benchmarking
exercise stipulated within the sustainable
procurement policy, sustainability questions
will form part of our due diligence process,
with questionnaires sent to our key
suppliersannually.
Our targets
Our operational net zero feasibility
assessment concluded that we have more
control over our office emissions and that a
number of our key suppliers surveyed have
already established carbon reduction targets
over the near term, however there remains
more uncertainty over the long term with a
number of key dependencies identified (see
page 45). As such, until we have increased
confidence over these key dependencies,
wehave not committed to a long-term net
zero target at this stage.
As a result of the feasibility assessments
undertaken during the year, we have
established the following near-term carbon
reduction targets:
• Reduce our Scope 1 and 2 (market-based)
emissions by at least 42% by 2030 from
2022 baseline.
• Reduce our Scope 3 emissions by at least
25% by 2030 from 2022 baseline. This
target includes categories 1 and 2 of the
GHG Protocol, which covers over 67% of
our baseline operational scope 3 emissions.
These near-term targets are aligned with
theprinciples of the Science-Based Targets
initiative’s (SBTi) Corporate Net Zero standard.
We are awaiting the outcome of the SBTi’s
revisions to this standard and will then
consider formally committing to, and
validating, these near-term targets.
Performance vs target from
baseline year
We have recorded consecutive years of
reduction in Scope 1 and 2 emissions from
our 2022 baseline year, putting us on track to
meet our near-term target. In regard to our
Scope 3 emissions, we anticipate greater
reductions in the coming years as more of
our suppliers begin to report their emissions
data and implement their own net zero
transition plans.
To ensure we remain on track to achieving
our targets, we have established key risk
indicators aligned to the near-term target
wehave set and will monitor progress on a
quarterly basis, in line with the existing risk
management framework outlined on pages
58 to 60.
Scope 1 and 2
tCO
2
e
465
458
318
Near-term target
42% reduction in
Scope 1 and 2 emissions
20232022
Baseline
2024
– 32% reduction
achieved in 2024 compared
to our 2022 baseline
2030
Target
270
Scope 3
1
tCO
2
e
5,461
6,154
5,383
Near-term target
25% reduction in
Scope 3
1
emissions
20232022
Baseline
2024
– 1% reduction
2
achieved in 2024 compared
to our 2022 baseline
2030
Target
4,096
1. This illustrates Scope 3 emissions for only categories 1 and 2 of the GHG Protocol, aligned with the boundary
set in our Scope 3 near-term target.
2. We have undertaken a rebaseline exercise to ensure our baseline Scope 3 emissions reflect
ourcurrentmethodology.
Strategic report Governance Financial statements Other information
42 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 43
Scope 1 and 2 Scope 3
Responsible business
Our roadmap
Our roadmap sets out the steps we would be required to take to reach operational net zero by 2050. We have identified steps over the near
term (before 2030) and the long term (2030 to 2050). Our long-term activities have been included within the roadmap to show our route to
achieving net zero, however these are not yet committed actions given the key dependencies outlined below.
Status key:
Completed Ongoing Planned Under consideration
Scope 1 and 2
Scope Step Activity
Estimated
annual savings
(tCO
2
e) Status
Near term
(before 2030)
2 (Electricity) Switching to
renewable
electricity tariffs
Electricity across all three offices is now purchased
through fully renewable electricity tariffs andverified
by Renewable Electricity Guarantees of Origin (REGO)
certificates.
228
1 (Gas) and
2(Electricity)
Building
upgrades
We will undertake several upgrades to optimise
energy efficiency across our Manchester office.
These include replacement of air handling units,
installation of demand control ventilation units and
refurbishment of fan coil units.
86
Long term
(after 2030)
1 (Gas and
refrigerants)
Gas boiler
replacement
1
Gas fired boilers to be replaced with high efficiency
electrical air source heat pumps capable of providing
heating and cooling. This will remove gas usage from
our Manchester office in its entirety.
101
2 (Electricity) Install LED
lighting
1
Installation of high-efficacy LED lighting and daylight
dimming controls to reduce the energy directly used
by lighting whilst also reducing the associated
cooling load.
39
1 (Refrigerants) Refrigerant
alternatives
Upgrading equipment across our Manchester office to
reduce reliance on refrigerants. Where unavoidable,
we will look to use greener alternatives to refrigerants.
~5
1 (Gas) and
2 (Electricity)
Building
optimisations
and retrofits
Additional optimisations to further improve the
overall performance of the Manchester office,
including consideration of enhancing the building
energy management system complimented by the
implementation of analytical monitoring controls,
new pump motor technology in the cold water tanks
and general upgrades to key infrastructure.
~5
Scope 3
Category Steps Activity Status
Near term
(before 2030)
1: Purchased
goods and
services and
2:Capital
goods
Sustainable
procurement
policy
We have implemented a sustainable procurement policy during the
year which aims to support buyers in making informed sustainability-
related decisions as part of the supplier selection process. The policy
also requires an annual sustainability due diligence process to
beundertaken.
Key supplier
engagement
Collect emissions data from our largest suppliers and encourage
keysuppliers to commit to their own net zero commitments, whilst
implementing processes to monitor our suppliers’ progress against
their targets.
Long
term
(after
2030)
1: Purchased
goods and
services and 2:
Capital goods
Ongoing
supplier
engagement
Continue to collect and monitor suppliers’ emissions data and carbon
reduction targets. Engage with all suppliers to ensure they uptake
commitments and develop credible transition plans aligned with
ourown net zero ambition.
1. For the purposes of achieving net zero we have included these two measures as long-term activities in our roadmap, however these steps could be accelerated into the near term if the
proposed changes to MEES regulations are introduced into legislation.
Carbon offsetting and removal
Whilst our primary focus remains on value-chain decarbonisation, we
acknowledge the role carbon offsetting plays in achieving our net zero
ambitions to address unavoidable emissions. Our roadmap currently
includes investment in carbon credits as part of our beyond value chain
mitigation and we will continue to monitor our stance on this as best
practice recommendations in the offsetting market evolves. To ensure
our offsets meet the highest standards, we only invest in carbon credit
projects which have been certified by a carbon crediting standard that
is aligned with the Integrity Council for the Voluntary Carbon Market
(ICVCM) and its Core Carbon Principles (CCPs).
Looking ahead
We acknowledge the existing Corporate Net Zero Standard, to which our existing near-term target is aligned, is currently undergoing major
revision with V2.0 coming into effect in 2026. As such, once the new standards are published, we will review our existing near-term targets
against the latest methodology, to ensure we are compliant before we consider committing to SBTi.
Building on the initial processes established during the year, we will continue to engage with our key suppliers so that we can improve the
quality of data we receive from the supply chain. This will allow us to enhance our analysis, identify hotspots and evaluate the feasibility of
achieving substantial carbon reductions over the long-term time horizon.
Our roadmap summarises our latest assessment of the steps we have identified as integral to successfully achieving our net zero aspirations.
Werecognise that our roadmap will continue to evolve as we progress through the plan.
Steps Activity Status
Near term
(before 2030)
Beyond value
chain mitigation
(BVCM)
BVCM is a broader mechanism to address global emissions by supporting initiatives that
contribute to decarbonisation efforts but fall outside of our Scope 1, 2 and 3 emissions
footprint. We continue to offset our Scope 1 and 2 carbon emissions through our
ongoing relationship with Carbon Footprint Limited to select carbon credit projects
which have been certified by a carbon crediting standard that is aligned with the Integrity
Council for the Voluntary Carbon Market (ICVCM) and its Core Carbon Principles (CCPs).
Long term
(after 2030)
Nature-based
investments
We will invest in nature-based solutions, such as tree planting, to remove our residual 10%
of carbon emissions.
FY24 offsetting: Safe Water Project
We have chosen to offset our Scope 1 and 2 emissions for
2023 by supporting the Safe Water Project in Zambia’s Western
Province. The project rehabilitates and maintains vital safe
water sources that provide a reliable means of access to clean
drinking water for local communities, reducing the emissions
generated from purifying water and the significant health risks
associated with unsafe water. By supporting this project we
continue to be carbon neutral for the fifth consecutive year.
Key dependencies
Our operational net zero roadmap is forward-looking and contains a number of key assumptions that are dependent on external factors
outside our control. In the development of our detailed transition plan, we have identified both macro and supply chain factors on which
we have a key dependency in order to be able to achieve our near-term scope targets.
Clean tariff accessibility
Decarbonising our Scope 1 and 2
emissions requires continued access to
clean, affordable renewable energy
through direct tariffs and availability of
REGOs.
Energy efficient office availability
We are a growing business and may need
to increase our office space in future
years. We are therefore dependent on
the availability of energy-efficient offices
aligned to our carbon reduction targets.
Supplier commitments
The willingness and ability of suppliers to
establish targets and deliver on their
climate transition plans.
Government policy
New policies on reducing greenhouse
gas emissions and introduction of new
sustainability reporting requirements
willbe required to help deliver
decarbonisation across the value chain.
Data quality
Better data availability from all suppliers
is critical to enable us to accurately
model our future emissions for the
purpose of reporting on target progress.
Global decarbonisation
Structural changes in key systems and
markets, such as access to new
energy-saving technologies and
decarbonisation of the national grid.
Strategic report Governance Financial statements Other information
44 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 45
Risk
management
Strategy
Governance
Metrics and
targets
Climate-related financial disclosures
Disclosure level:
Full Partial Omitted
TCFD recommendation Status
Governance: Disclose the organisation’s governance around climate-related risks and opportunities.
a) Describe the Board’s oversight of climate-related risks and
opportunities.
We have reported how the Board and its Committees oversee
our climate-related risks and opportunities on page 48.
b) Describe management’s role in assessing and managing climate-
related risks and opportunities.
We have reported management’s roles and responsibilities in
assessing and managing climate-related risks on page 48.
Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and
financial planning where such information is material.
a) Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.
We have disclosed the climate-related risks identified over the
short, medium, and long term on pages 48 and 49.
b) Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.
We have detailed the financial impact and our strategic response
for each risk identified on page 49.
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.
We have performed scenario analysis over our identified risks,
details of which have been disclosed on page 49. This year the
focus has been on qualitative analysis whilst we continue to
explore approaches to quantitative analysis for future reports.
Risk management: Disclose how the organisation identifies, assesses, and manages climate-related risks.
a) Describe the organisation’s processes for identifying and assessing
climate-related risks.
b) Describe the organisation’s processes for managing climate-
related risks.
c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall
risk management.
Our approach to the identification, assessment and
management of climate-related risks is integrated into our
Group risk management framework, further details of which are
disclosed in our Risk management report on pages 58 to 60.
Climate-related risks, controls and Key Risk Indicators (KRIs) are
mapped to the ESG risk appetite category and reviewed at the
ESG working group, Risk Management Forum, Executive Risk
Committee and Risk & Compliance Committee.
We have recognised an ESG-related principal risk and
uncertainty, which includes climate-related risks. Further
information is provided on page 61.
Metrics and targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where
such information is material.
a) Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
management process.
We split our metrics by the impact of our operations and the
impact of our investments. We have reported the metrics on
pages 50 to 52.
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas emissions, and the related risks.
We have disclosed our Operational Scope 1, 2 and 3 emissions
on page 50. We have disclosed our AJ Bell Investments Scope 3
emissions for our Funds and Managed Portfolio Service on
page52.
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
againsttargets.
We have set operational near-term targets and further
developed our roadmap to achieving net zero on pages 42 to 45.
We will continue to assess the feasibility of longer-term net zero
targets before committing to them.
TCFD compliance statement
As required by paragraph 8(a) of Listing Rule 6.6.6R, we set out in the table below our statement of compliance with the TCFD
Recommendations and Recommended Disclosures.
Where disclosures have been partially omitted, we have detailed the reasons for not including such disclosures, the steps we are taking in order
to be able to make those disclosures in the future, and the timeframe in which we expect to be able to make those disclosures.
Climate-related data
andmethodological
challenges
We have used climate-related data
tomonitor our exposure to identified
climate-related risks and measure the
climate-related metrics included within
this report. This data has been supplied
by multiple third-party providers as
detailed in the report, and we have
placed reliance on the accuracy of the
data provided.
We have observed gaps relating to
theavailability of data, and lack of
industry alignment on scenario analysis
and Scope 3 emissions calculation
methodologies, and expect future
iterations of this report to build on
ourexperience to strengthen metrics
and methodologies.
Our approach
Climate change is one of the most significant global challenges we face today.
Itis a critical issue impacting all our stakeholders and wider society. At AJBell,
werecognise the importance of societal action to reduce global emissions and
are committed to playing our part in the transition to a lower-carbon economy.
We are pleased to present our third report on climate-related disclosures, aligned to
the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations
and Recommended Disclosures.
During the year, we have focused on increasing compliance with areas of the
recommended disclosures we did not fully comply with in last year’s report.
Thisincluded setting operational near-term carbon reduction targets and
furtherdeveloping our roadmap to achieving net zero across our operations.
The report is structured around the four pillars of the TCFD framework:
governance, strategy, risk management, and metrics and targets. Our disclosures
have also been informed by the accompanying financial sector guidance as well as
the TCFD’s other relevant guidance materials.
Strategic report Governance Financial statements Other information
46 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 47
Governance
Climate governance is captured in our Responsible Business governance framework, as detailed on page 29.
Board oversight of climate-related risks and opportunities
The Board is responsible for the conduct of our business and the development of its strategy, as well as promoting the long-term sustainable success
of the business. This includes our strategy relating to climate-related risks and opportunities.
The Board has delegated specific powers, duties and decision-making responsibilities to its five main committees as set out in our Corporate
Governance report on pages 78 to 80. The Risk & Compliance Committee and Audit Committee have oversight responsibility for aspects of our
approach to managing climate-related risks and opportunities, as set out below.
Board Committee Responsibility Activity in FY24
AJ Bell plc Board
The Board is responsible for the conduct of our business and
the development of its strategy, as well as promoting the
long-term sustainable success of the business. This includes
our strategy relating to climate-related risks and opportunities.
• Reviewed annual management progress
updates on our responsible business
strategy, including TCFD.
Risk & Compliance
Committee
The Committee is responsible for ensuring that climate risk is
effectively embedded in risk management frameworks and risk
reporting and understanding how climate change poses a
threat to the organisation.
• Reviewed climate-related risk
assessments and scenario analysis.
Audit Committee
The Committee is responsible for scrutinising climate-related
financial information and disclosures, applying the same process
and quality assurance methods as for financial information.
• Reviewed the Group’s TCFD disclosures.
During the year, the Non-Executive Directors held a forum to review our operational net zero roadmap and proposed targets. The forum
challenged management on the proposed transition plan to net zero and provided further actions for management to consider before
committing to a net zero target.
Further information on the activities of the Board and its Committees during the year is provided in the Governance section of this report from pages
70 to 123.
Management’s role in assessing and managing climate-related risks and opportunities
The CFO has the delegated authority from the Board to manage our ESG strategy, including our climate-related risks and opportunities. The CFO
issupported by our cross-functional ESG working group for the consolidation of our approach and co-ordination of day-to-day activities.
In addition to review from the ESG working group, the identified climate-related risks and opportunities were governed in line with our risk
management framework, which included review and challenge of climate-related risk assessments and scenario analysis by the Risk Management
Forum and Executive Risk Committee ahead of being presented to the Risk & Compliance Committee.
Relevant processes and responsibilities are embedded into our Finance, Risk and Operational functions.
Strategy
Climate-related risks and opportunities
To ensure our strategy adequately responds to climate-related risks and opportunities, we have performed an assessment of our exposure to a range
of climate-related risks and opportunities, including both the physical and transitional risks of climate change.
Physical risks are caused by changes in the climate and can be event-driven (acute) through the increased frequency and severity of extreme weather
events such as hurricanes or floods, or result from longer-term shifts in climate patterns (chronic) such as rising sea levels or chronic heat waves.
Transitional risks are caused by the adjustment towards a net zero economy, which will involve significant changes to policy, technology, law, and
investor and consumer attitudes.
We assessed the risks and opportunities over the short term (5 years), medium term (10 years) and long term (30 years).
To help inform the assessment of the identified climate-related risks and opportunities, we have considered their potential impacts under different
transition pathways using climate scenario analysis. These scenarios are not predictions of climate-related outcomes but are used as hypothetical
scenarios to aid our understanding of the impact that climate change could have on our business.
We selected three scenarios based on those constructed by the Network for Greening the Financial System (NGFS) (Phase IV). Many central banks,
including the Bank of England, carry out assessments based on NGFS scenarios. We have intentionally selected three contrasting scenarios; one
representing a smooth and orderly transition, one involving heightened transition risks due to a disorderly transition, and a third which incorporates
more extreme physical risks due to a lack of climate-related policy.
Our climate scenario analysis has been primarily qualitative in nature. We view this as an iterative process and will look to build on our assessment in
future years so that it can further inform our strategy and risk assessment.
Scenario Policy ambition Description
Net Zero 2050 1.4°C An ambitious scenario which limits global warming to 1.5°C. Climate policies are assumed
to be introduced early on, gradually becoming more stringent.
Delayed Transition 1.6°C This scenario assumes global emissions do not decrease until 2030. Climate policies are
delayed leading to higher transition and physical risks than Net Zero 2050.
Current Policies 3°C+ A scenario of low ambition assuming only those climate policies currently implemented
aremade. Transition risks are not as high as a disorderly transition but there are severe
physical risks.
We have summarised each of the climate-related risks identified below, including the potential impact of these risks and our strategic response.
Our responses to the risks identified also present opportunities for the business. For example, by offering responsible investment solutions to our
customers, we can reduce the risk of falling asset values impacting our revenue, whilst also providing an opportunity to capitalise on changing
consumer demand for these solutions.
Probability:
Unlikely Possible Likely
Probability
Risk Definition Potential impact
Short
term
Medium
term
Long
term Strategic response
Reputational
(Transition)
The risk that customers are
unhappy with the level of
responsible investment
options available on our
platform, or the accuracy
and completeness of
product information.
The risk that customers or
stakeholders perceive that
our response to climate
change is inadequate.
Customers direct capital
to alternative platforms.
We experience reduced
customer demand for our
responsible products and
potential litigation action.
1.4°C
• We provide a wide range of sustainable
investment options on our platform,
including managed investment solutions
of our own which consider ESG factors.
• We review our AJ Bell Investments’
responsible product literature to ensure it
complies with regulations, such as the
Anti-Greenwashing Rule.
• We are implementing the FCA’s
Sustainability Disclosure Requirements,
both as manufacturer and distributor,
recognising the key role we play in
communicating sustainability information
to retail investors.
• We embedded the TCFD
recommendations and have developed
short-term carbon reduction targets in our
journey to achieve operational net zero.
We are also assessing longer-term targets
to meet our ambitions to decarbonise.
1.6°C
3°C+
Market
(Transition
and Physical)
The risk that climate
change or the transition to
a lower-carbon economy
negatively impacts the
global economy, and
therefore the value of
assets on our platform and
in our range of managed
investment solutions.
Assets with exposure to
climate-related risks could
face reductions in value,
impacting customer
returns and our fee
revenues.
1.4°C
• We offer a diverse range of investments on
our open-architecture platform, allowing
our customers to diversify and respond to
changing macroeconomic trends.
• We provide Morningstar’s Sustainability
Rating for funds available on our platform
and continue to review how we can make
climate-related information available.
• We have carried out developments to
provide access to sustainability labels and
SDR-related disclosures, where provided
by product manufacturers.
• AJ Bell Investments offers responsible
investment solutions with ESG-specific
considerations.
1.6°C
3°C+
Policy,
legaland
regulatory
(Transition)
The risk that there is a need
to comply with increasing
legal, regulatory, and
disclosure obligations.
Increased cost to the
business to meet the
requirements and / or
restrictions to product
offerings.
1.4°C
• Our Risk and Compliance functions
conduct regular horizon scanning and
review regulatory publications on an
ongoing basis.
• We seek to comply with all climate-related
regulatory requirements through a
materiality lens, ensuring cost of
compliance is kept under control.
1.6°C
3°C+
Acute &
Chronic
(Physical)
The risk of longer-term
changes in climate patterns
such as flooding, extreme
weather and higher
temperatures impacting
our operations.
Increased cost to the
business due to risk of
flooding at our offices or
reduced employee
productivity.
1.4°C
• Our hybrid working model provides
operational resilience to the potential
impact of flooding at our offices.
1.6°C
3°C+
Climate-related financial disclosures
Strategic report Governance Financial statements Other information
48 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 49
1. The impact of our operations
As a financial services business, our direct operational environmental impact is primarily from the emissions generated in running our three offices in
Manchester, London and Bristol, and the indirect emissions generated in our supply chain.
Our operational CO
2
e emissions
Emissions 2024 2023
Scope 1 and 2 Tonnes of CO
2
e
Scope 1 182 223
Scope 2 (location-based) 139 136
Scope 2 (market-based) 136 235
Total Scope 1 and 2 (market-based) 318 458
Scope 3 Tonnes of CO
2
e
1. Purchased goods and services
1
5,181 5,876
2. Capital goods
1
202 278
3. Fuel and energy-related activities 75 71
5. Waste generated in operations 2 2
6. Business travel 228 221
7. Employee commuting and working from home
2
1,110 1,114
8. Upstream leased assets
3
170 170
Total Scope 3 6,968 7,732
Total Scope 1, 2 and 3 7,286 8,190
Intensity per FTE (Scope 1 and 2)
4
0.23 0.36
Intensity per customer (Scope 1, 2 and 3)
4
0.013 0.017
Energy usage kWh
Energy consumption in the UK
1
2,241,984 2,160,906
1. The methodology for calculating purchased goods and services and capital goods has been refined in 2024, with our emissions calculated under the spend-based approach using a
more granular industry average emissions database. We have rebaselined our emissions for the purpose of monitoring our performance against targets (see page 43) and have also
restated our 2023 emissions in our TCFD disclosure to reflect the latest methodology.
2. Following a data review of our employee commuting data, 2023 has been restated to 1,113 tCO
2
e (previously 637 tCO
2
e).
3. In 2024, we sourced data from the building manager to show electricity consumption in landlord common areas at our Manchester head office. We have therefore restated both the
Scope 3 category 8 emissions and SECR energy usage disclosure for FY23 to reflect this. We do not control the purchase of electricity in these areas therefore we have categorised
emissions pertaining to these areas under Scope 3.
4. In line with our target setting approach to measure Scope 2 emissions under the market-based method, we have restated 2023 intensity measures to reflect Scope 2
market-basedemissions.
We are pleased to report a 38% reduction in our total Scope 1 and 2 emissions intensity per FTE in the year as we switched to renewable energy tariffs
in the year across all our offices.
The most significant driver of our Scope 3 emissions relates to the goods and services purchased in our supply chain. There has been a change in the
composition of our supplier spend during the year, with more spend weighted towards those suppliers who publicly report on their carbon emissions.
This has contributed to a reduction in our overall emissions year-on-year as our suppliers implement their own carbon reduction initiatives.
Metrics and targets
Our climate-related metrics focus on the impact our business activities have on the environment. We measure and report our impact in two
distinctcategories:
Methodology and boundary
The Greenhouse Gas (GHG) reporting period is aligned to the financial reporting year. The methodology used to calculate emissions is based on the
financial consolidation approach, as defined in The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition).
The Group’s carbon footprint was calculated using an operational control approach. Under this approach, all entities and associated assets
overwhich the Group has 100% operational control are included under the organisation’s Scope 1 and 2 emission categories. All other entities,
over which the Group does not have 100% operational control, such as third-party processing sites and data centres, are included in the
organisation’s Scope 3 emissions along with all other indirect emissions associated with the organisation.
We have chosen to report our operational Scope 1 and 2 emissions per FTE, and our operational Scope 1, 2 and 3 emissions per customer as
our intensity measures. We have used these measures as our Scope 1 and 2 emissions are primarily driven by our employees working in our
offices, whilst purchased goods and services represent 74% of our total Scope 1, 2 and 3 emissions with this spend primarily driven by serving
the needs of our customers.
Scope Category Source Calculation methodology
1 Gas
Meter reads Actual consumption data is gathered from meter readings and converted using
the relevant emission conversion factors from the DEFRA (2024) database.
Other fuels
Meter reads We have estimated consumption during the period based on meter readings
from the date of last service and the year-end date, extrapolated to reflect the
full period. The relevant emission conversion factors are then applied using
the DEFRA (2024) database.
Refrigerant gas
Servicing
reports
Actual consumption data is gathered from servicing reports during the period,
which details refrigerant top ups by refrigerant type. Relevant emission
conversion factors from the DEFRA (2024) database are then applied.
2 Electricity
(location-based)
Meter reads Actual consumption data is gathered from meter readings and converted using
the relevant emission conversion factors from the DEFRA (2024) database.
Electricity
(market-based)
Meter reads We collect Renewable Electricity Guarantees of Origin (REGO) certificates for
those offices on renewable tariffs. Any consumption under these agreements is
determined to carry nil emissions during the period covered by the tariff. For those
offices where a REGO is not in place during the period, a residual mix emissions
factor has been applied.
3 1: Purchased goods
and services and
2: Capital goods
Actual supplier
spend during
the period
A spend-based approach has been used to calculate both purchased goods and
services and capital goods emissions. Where available, we use actual supplier
emissions data, from the most recent Carbon Disclosure Project (CDP) response
dataset or published company reports. Data gaps were supplemented using
industry average emissions contained within the Small World Consulting
multi-regional input-output model.
3: Fuel and energy-
related activities
Scope 1 and 2
consumption
We apply a Well-To-Tank (WTT) emissions factor, obtained from the DEFRA
(2024) database, to our Scope 1 and 2 consumption.
5: Waste generated
inoperations
Estimated
based on
WRAP Waste
benchmark
Waste generation is estimated using our latest FTE number from each site and
applying the usage rate (kg / FTE / annum) derived from the WRAP Waste
benchmark. We then apply the relevant emission conversion factors from the
DEFRA (2024) database.
6: Business travel
Actual spend
and expensed
mileage data
We use both spend-based and actual distance data to calculate our business
travel emissions. Spend data was converted into distance using industry
averages. The relevant emission conversion factors from the DEFRA (2024)
database are then applied to each type of business travel expense.
7: Employee
commuting and
working from home
Employee
sustainability
survey
We collected data from staff on their home working and travel arrangements
aspart of an annual employee sustainability survey. For working from home
emissions, assumptions within the EcoAct (2020) whitepaper were used to
calculate energy usage. The relevant emission conversion factors from the
DEFRA(2024) database are then applied.
8: Upstream
leasedassets
Electricity bills Electricity bills are collected from the building manager for common area
electricity usage. The relevant emission conversion factors from the DEFRA (2024)
database are then applied.
Critical to good reporting is a well-defined reporting boundary. We have reviewed the boundary for our operational GHG emissions reporting
to ensure it remains appropriate. During the year, following a review of our electricity consumption data at our Manchester head office, we
identified consumption data relating to landlord common areas. We do not control the purchase of electricity in these areas and therefore
aligned to our operational control methodology, have identified emissions from this source as indirect (Scope 3). We have categorised these
emissions under category 8, being emissions produced from leased assets. We have considered the following Scope 3 categories to be out of
the boundary of our reporting:
• 4. Upstream transportation and distribution – included in category 1, purchased goods and services.
• 9 – 14. Downstream categories – we do not produce and distribute physical goods or operate any franchises.
• 15. Investments – we have reported the impact of our discretionary managed investment solutions in the impact of our investments.
Climate-related financial disclosures
1. The impact of our operations
This is the direct and indirect impact we have on the
environment from our operations. We measure and report
ourkey metrics being our Scope 1, 2 and 3 greenhouse gas
emissions, excluding category 15 investments, and our carbon
intensity metrics per customer and employee.
2. The impact of our investments
This is the impact we have on the environment through
ourAJBell Investments’ discretionary managed investment
solutions. We measure and report the carbon footprint
andweighted average carbon intensity (WACI) of our
discretionary AUM.
Strategic report Governance Financial statements Other information
50 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 51
2. The impact of our investments
We utilise the WACI and carbon footprint as the key metrics for measuring the impact of our AJ Bell Investments Funds and Managed Portfolio
Service on the environment. We use these metrics as they represent our portfolio’s exposure to carbon-intensive companies.
WACI provides information on the level of Scope 1 and 2 emissions within our Funds and Managed Portfolio Service per million $ of revenue
that is generated by the underlying entities.
Carbon footprint represents the share of Scope 1 and 2 emissions generated by underlying holdings per million $ that is invested in our Funds
and Managed Portfolio Service.
Our investments’ carbon footprint emissions
Product 2024 2023
Tonnes of CO
2
e per $m AUM
AJ Bell Funds 74 113
Managed Portfolio Service 61 90
Our investments’ carbon intensity (WACI)
Product 2024 2023
Tonnes of CO
2
e per $m revenue
AJ Bell Funds 147 159
Managed Portfolio Service 133 138
Coverage of assets
Product 2024 2023
% Total AUM
AJ Bell Funds 85% 70%
Managed Portfolio Service 83% 55%
We are pleased to report a reduction in our carbon footprint and WACI across our AJBell Funds and Managed Portfolio Service during the year.
Goingforwards, we aim to continue to increase the coverage of our financed emissions reporting through improvements to our data
collectionprocess.
Methodology and boundary
We have defined our methodology in line with the Partnership for Carbon Accounting Financials (PCAF), the global emissions standard for the
financial industry as recommended by the TCFD supplemental guidance for asset managers. In line with the standard, we have performed our
calculation using the enterprise value including cash (EVIC) methodology.
Access to reliable climate-related data covering all underlying holdings is an industry-wide challenge. In calculating our footprint and WACI, we
currently have some gaps, such as emissions from sovereign bonds, and therefore we have reported a coverage percentage which represents the
proportion of total assets within our Funds and Managed Portfolio Service for which we have sourced the required data, and which are therefore
included within our calculation. We will continue to monitor industry-wide developments for an aligned approach to quantifying sovereign bonds’
financed emissions.
In FY24 we have sourced the relevant emissions data for the investments that our portfolios hold at the fund level from MSCI, aligned to the way in
which our funds are managed. Thiscontrasts with the approach taken in previous years where we obtained the data from the underlying equities
within the investments held across all AJBell Funds and Managed Portfolio Service. We have not updated the prior year emissions to reflect the
new methodology approach.
MSCI collects reported emissions data once per year from the most recent corporate sources. When companies do not disclose data, or where
anunderlying equity’s emissions are not aligned with GHG Protocol framework or do not represent emissions across all its geographies and
operations, MSCI ESG Research uses proprietary Scope 1 and 2 carbon emissions estimation models to derive the data. Due to the volume of data,
it is not practical to undertake an independent verification of MSCI’s data. We have therefore placed reliance on the accuracy of data provided by
MSCI for the purposes of the calculation.
The calculation is based on our portfolio asset allocation as at 30 September 2024. Due to data limitations, where we have gaps, we reweight
our portfolio to 100%.
Investments net zero
We will continue to monitor the development of net zero standards for financial institutions and seek to understand the impact of net zero on
our investments business as the business continues to grow.
Climate-related financial disclosures Non-financial and sustainability information statement
We aim to comply with all areas of the Non-Financial Reporting requirements contained within sections 414CA and 414CB of the
Companies Act 2006.
Information regarding non-financial matters is included throughout our Strategic report and the following table summarises the policies and
outcomes together with references to where further information can be found.
Reporting requirement Some of our relevant policies and standards Where to read more in this report about our impact Page(s)
Environmental matters
• Environmental Policy Environmental awareness 42–45
Employees
• Employee Handbook
• Health and Safety Policy
• Diversity and Inclusion Policy
• Recruitment and Selection Policy
• Hybrid Working Policy
• General Remuneration Policy
• Whistleblowing Policy
• Safeguarding Policy
Responsible employer 34–38
Social matters
• Treating Customers Fairly
• Charitable Giving in the Community
Policy
Supporting our local communities 39–41
Human rights
• Human Rights Policy
• Modern Slavery Statement
Human rights and modern slavery 38
Anti-corruption and
anti-bribery
• Anti-Bribery and Corruption Policy
• Anti-Money Laundering Policy
• Gifts and Hospitality Policy
• Market Abuse Policy
Anti-bribery and corruption 38
Climate-related
financialdisclosures
• TCFD report Climate-related financial disclosures 46–52
Additional information Where to read more in this report Pages
Business model
Our business model 20–21
Principal risks and how they are managed
Principal risks and uncertainties 61–66
Non-financial KPIs
Key performance indicators 22–23
Strategic report Governance Financial statements Other information
52 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 53
Chief Financial Officer’s review
Delivering our growth
ambitions
Our consistently strong financial
performance has enabled us to invest in
enhancing our propositions, lowering
charges for our customers and
increasing our brand awareness
whilstdelivering record results.”
Peter Birch
Chief Financial Officer
Overview
We are pleased to report excellent results for our business this year,
achieving record highs in customer numbers, AUA, revenue and
profit. Our dual-channel platform achieved very strong net inflows
of£6.1 billion (FY23: £4.2 billion) and customer growth of 14% (FY23:
12%) as we realised the benefits of the investments we made in the
business and retail investor confidence improved.
Our diversified revenue model enables us to deliver sustainable profit
in different market conditions. Revenue increased by 23% to £269.4
million (FY23: £218.2 million), with increasing margins driving PBT
up29% to £113.3 million (FY23: £87.7 million).
The low-cost element of our business strategy ensures we can offer
great value to our customers, and to achieve this we have continued to
focus on maintaining an efficient operating model. We are reviewing
processes, optimising resource allocation and leveraging technology
as part of an organisational-wide initiative to continue to drive future
operational efficiency. These efforts will deliver controlled cost growth
and ensure we retain the capacity to invest in the business to deliver
long-term growth.
Alongside consistently delivering strong business growth, we have
also returned capital to shareholders in the form of a progressive
dividend. Our excellent financial performance over recent periods,
supported by our highly cash-generative business model, has
allowed us to accumulate surplus capital beyond regulatory
requirements. Consequently, the Board recommends a final
dividendof 8.25 pence per share (FY23: 7.25 pence per share),
alongside the launch of a share buyback programme of up to
£30million, set to begin immediately.
Business performance
Customers
Customer numbers increased by 66,000 during the year to a total of 557,000 (FY23: 491,000). D2C customers increased by 17%, with advised customers up by 8%.
Our platform customer retention rate remained high at 94.2% (FY23: 95.2%).
30September 2024
‘000
30September 2023
‘000
Advised platform 171 159
D2C platform 371 317
Total platform 542 476
Non-platform 15 15
Total 557 491
Assets under administration
Year ended 30 September 2024
Advised platform
£bn
D2C platform
£bn
Total platform
£bn
Non-platform
£bn
Total
£bn
As at 1 October 2023 48.2 22.7 70.9 5.2 76.1
Inflows 6.5 6.6 13.1 0.3 13.4
Outflows (4.3) (2.7) (7.0) (0.3) (7.3)
Net inflows 2.2 3.9 6.1 – 6.1
Market and other movements 5.7 3.8 9.5 0.5 10.0
As at 30 September 2024 56.1 30.4 86.5 5.7 92.2
Year ended 30 September 2023
Advised platform
£bn
D2C platform
£bn
Total platform
£bn
Non-platform
£bn
Total
£bn
As at 1 October 2022 44.8 19.3 64.1 5.1 69.2
Inflows 5.0 4.3 9.3 0.2 9.5
Outflows (3.1) (2.0) (5.1) (0.3) (5.4)
Net inflows / (outflows) 1.9 2.3 4.2 (0.1) 4.1
Market and other movements 1.5 1.1 2.6 0.2 2.8
As at 30 September 2023 48.2 22.7 70.9 5.2 76.1
We achieved platform net inflows of £6.1 billion (FY23: £4.2 billion), up 45% versus the prior year, highlighting the strength of our overall customer value proposition
in both the advised and D2C markets.
Advised platform net inflows were £2.2 billion (FY23: £1.9 billion), driven by an increase in gross inflows to £6.5 billion (FY23: £5.0 billion). We have seen higher
inflows from new customers supported by an uptick in inbound migration activity, as advisers were more willing to bulk transfer customers in FY24 following
stronger market conditions. Outflows in the year increased to £4.3 billion (FY23: £3.1 billion), predominantly driven by higher levels of client withdrawals in response
to inflationary pressures, and to a lesser extent, the impact of recent adviser consolidation.
D2C platform net inflows were £3.9 billion (FY23: £2.3 billion). Gross inflows increased to £6.6 billion (FY23: £4.3 billion), as investor confidence improved following a
strong recovery in global equity markets. We achieved a 63% increase in SIPP gross inflows, reiterating the importance of tax-wrapped products for our customers,
and also delivered strong inflows from new customers as our investment in brand continued to deliver results. Outflows increased to £2.7 billion (FY23: £2.0 billion),
reflecting the overall growth in customers numbers, as well as some customers drawing down on their investments to meet higher costs of living.
Non-platform net inflows remained stable in line with our expectation, with AUA closing at £5.7 billion (FY23: £5.2 billion). Favourable market movements
contributed £10.0 billion (FY23: £2.8 billion) as global equity values continued to recover strongly from the challenges experienced in previous years.
Thisresulted in record closing AUA of £92.2 billion (FY23: £76.1 billion).
Assets under management
30September 2024
£bn
30September 2023
£bn
Advised 3.5 2.5
D2C 1.9 1.3
Non-platform
1
1.4 0.9
Total 6.8 4.7
1. Non-platform AUM relates to AJ Bell Funds and MPS held on third-party platforms.
We continue to see increased demand for our suite of straightforward, cost-effective investment solutions particularly in the advised market via AJBell
Investcentre and third-party adviser platforms. We recorded net inflows of £1.5 billion, supported by strong investment performance that generated market
movements of £0.6 billion, resulting in total AUM closing at £6.8 billion (FY23: £4.7 billion).
Revenue
£269.4m
+23%
PBT
£113.3m
+29%
Strategic report Governance Financial statements Other information
54 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 55
Chief Financial Officer’s review
Financial performance
Revenue
Year ended
30September
2024
£000
Year ended
30September
2023
£000
Recurring fixed 32,078 30,666
Recurring ad valorem 202,040 161,152
Transactional 35,317 26,416
Total 269,435 218,234
Revenue increased by 23% to £269.4 million (FY23: £218.2 million).
Recurring fixed fees increased by 5% to £32.1 million (FY23: £30.7
million), driven by increased pension administration revenue following
growth in our advised platform customers.
Recurring ad valorem revenue grew by 25% to £202.0 million (FY23:
£161.2 million) with two key driving factors. Firstly, we earned higher
custody fee income in the period, driven by the higher average AUA
onthe platform. Secondly, net interest income generated on customer
cash balances held on the platform also increased with the rate retained
peaking in March. Cash held on the platform is readily available for
customers to invest or withdraw and in most cases represents a
temporary position while customers await investment opportunities.
Oureconomies of scale allow us to generate better gross interest rates
which enables us to pay market-competitive rates on customers’ cash
balances and keep our charges low. Further information on the impact
to revenue of changes to the UK base interest rate has been disclosed in
note 25 to the consolidated financial statements.
Transactional fees increased by 34% to £35.3 million (FY23: £26.4
million). Dealing activity was higher in the year due to improved retail
investor sentiment following a recovery in global equity markets. FX
revenue was also strong due to increased levels of dealing in overseas
shares, particularly US.
Our consolidated revenue margin increased to 31.6bps (FY23:
29.8bps). This was in line with expectation following the increases to
revenue detailed above. The revenue margin in the second half of the
year was lower than the first half following the reduction in charges
across the platform, which were effective from 1 April 2024, as we
passed on the benefits of our scale to our customers.
In FY25, we expect our revenue margins to moderate slightly taking
into account the annualised impact of our recent charge reductions.
We expect our revenue margins to be sustainable beyond 2025.
Administrative expenses
Year ended 30
September
2024
£000
Year ended 30
September
2023
£000
Distribution 29,592 25,928
Technology 49,873 40,317
Operational and support – underlying 76,453 64,991
Operational and support – exceptional 6,239 778
Total 162,157 132,014
Total administrative expenses increased by 23% to £162.2 million (FY23:
£132.0 million) as we delivered planned investments in our people,
technology and brand. The largest expense remains staff costs, which
increased by £15.5 million to £80.3 million (FY23: £64.8 million) as we
increased headcount to support our growth. We also further enhanced
our benefits package and ensured that our people received appropriate
salary increases that reflected the high inflation environment at the
start of the year.
Financial position
The Group’s financial position remains healthy, with net assets
totalling £204.0 million as at 30 September 2024 (FY23: £166.0
million) and a return on assets of 41% (FY23: 41%).
Financial resources and regulatory capital position
Our financial resources are continually kept under review,
incorporating comprehensive stress and scenario testing which
isformally reviewed and agreed at least annually.
Year ended
30September
2024
£000
Year ended
30September
2023
£000
Total shareholder funds 203,990 166,037
Less: unregulated business capital (4,150) (3,675)
Regulatory group shareholder funds 199,840 162,362
Less: foreseeable dividends (34,019) (29,807)
Less: foreseeable share buyback (30,000) –
Less: non-qualifying assets (12,994) (12,887)
Total qualifying capital resources 122,827 119,668
Less: capital requirement (59,577) (53,930)
Surplus capital 63,250 65,738
% of capital resource requirement held 206% 222%
During the year, we have continued to maintain a healthy surplus over
our regulatory capital requirement and as at the balance sheet date
this was 206% (FY23: 222%) of the capital requirement.
We operate a highly cash-generative business, with a short working-
capital cycle that ensures profits are quickly converted into cash.
Wegenerated net cash from operating activities of £96.3 million
(FY23: £101.4 million) and held a significant surplus over our basic
liquid asset requirement during the period, with our year-end balance
sheet including cash balances of £196.7 million (FY23: £146.3 million).
Shareholder capital returns
For FY24, in line with our new capital allocation framework, the
Boardhas recommended a final dividend of 8.25 pence per share
(FY23: 7.25 pence per share), resulting in a total ordinary dividend of
12.50 pence (FY23: 10.75 pence) for the year. This equates to a pay-out
of 61% of statutory profit after tax and is our 20
th
year of progressive
ordinary dividend growth. Reflecting the significant surplus capital held
in excess of our regulatory requirements, alongside our commitment
to deliver enhanced shareholder returns, the Board approved
anewshare buyback programme of up to £30 million, to be
completedbefore the end of the forthcoming financial year to
30September 2025.
Peter Birch
Chief Financial Officer
4 December 2024
Distribution costs increased by 14% to £29.6 million (FY23:
£25.9million). This was driven by the delivery of our multi-channel
advertising campaign, alongside our decision to increase spend on
direct marketing activity in the lead up to the tax year end resulting
inover 12,000 new customers joining the platform in March alone.
Aspart of our initiatives to raise brand awareness we have continued
our partnership as the title sponsor of the AJBell Great Run Series. In
addition, we incurred costs relating to our new Ready-made pension
service, which enables customers to locate their existing pensions and
easily consolidate them into our range of award-winning funds.
Technology costs increased by 24% to £49.9 million (FY23:
£40.3million). We have continued to invest in our change teams to
increase the pace at which we deliver enhancements to the platform.
Our improved change capacity gave us the confidence to accelerate
certain improvements to AJBell Investcentre in the second half of the
year that had originally been planned for FY25, which resulted in
technology costs being slightly higher than we guided in May 2024.
This additional investment will deliver longer-term efficiencies.
Underlying operational and support costs increased by 18% to
£76.5million (FY23: £65.0 million) with 4% of the increase being
highertransaction costs and higher variable pay, which were a direct
consequence of increased customer dealing activity and the record
financial performance of the business. The year-on-year increase
alsoreflected a higher-than-normal level of salary inflation, which is
expected to settle in future years, as well as increased headcount to
drive business growth.
Exceptional operational and support costs of £6.2 million (£0.8 million)
represent a provision for potential customer redress relating to historical
SIPP operator due-diligence issues in respect of non-mainstream
investments made by customers who had regulated financial
advisersacting for them prior to 2014. During the year a small number
ofFinancial Ombudsman Service (FOS) complaints were upheld in
favour of customers and the provision represents management’s best
estimate of the cost to compensate these customers as well as other
customers with comparable circumstances. The issue is historical in
nature and does not relate to our ongoing business. We have one
remaining FOS case in relation to such investments which has recently
been provisionally upheld in our favour, compared with circa 800 open
cases across the industry per the FCA’s Dear CEO letter of 4 November
2024. On the basis of published FOS decisions, we believe that future
complaints would be time-limited.
In FY25, we expect inflationary pressures to ease and further
operational gearing to be realised. We will continue to invest
todeliver our strategic priorities whilst maintaining strong
profitmargins.
Profitability and earnings
Investment income of £6.9 million (FY23: £2.4 million) was driven
byhigher interest earned on corporate cash balances in the year.
PBT increased by 29% to £113.3 million (FY23: £87.7 million) whilst
PBT margin increased to 42.0% (FY23: 40.2%). The higher profit
margin versus the prior year reflects the higher revenue margins
combined with a lower rate of cost growth as we continue to drive
cost efficiencies as part of our strategic focus.
The standard rate of UK corporation tax remained at 25.0%
throughout the year. Our effective rate of tax for the period
wasslightly ahead of this at 25.6% (FY23: 22.2%).
Basic earnings per share rose by 23% to 20.46 pence (FY23: 16.59
pence) in line with the increase to PBT. Diluted earnings per share
(DEPS), which accounts for the dilutive impact of outstanding share
awards, also increased by 23% to 20.34 pence (FY23: 16.53 pence).
Our capital allocation framework
Following a review of our long-standing dividend policy,
anewcapital allocation framework has been approved
duringtheyearwhich will see us move away from the 65%
fixedtargeted ordinary dividend payout ratio in favour of a more
formal progressive ordinary dividend policy, better aligned to our
highlycash-generative and capital light business model. The new
framework has no specific payout target thereby providing greater
flexibility to ensure capital resources are utilised effectively to
deliver long-term value to our shareholders, whilst retaining our
commitment to a progressive dividend.
Under our new capital allocation framework, we will consider
both the appropriateness of, and mechanism for, returning
surplus capital to shareholders on an annual basis.
Additional capital returns
Return of surplus capital not required for other
priorities considered annually
Inorganic investment opportunities
Consideration of potential bolt-on acquisitions
tosupport our strategy
Financial strength
Maintain an appropriate level of regulatory capital
and liquidity
Organic investment
Targeted investments to drive long-term business
growth, whilst maintaining good cost discipline
Supporting local communities
Commitment to donate 0.5% of profit before tax
to the AJBell Futures Foundation annually
Ordinary dividend
A regular, progressive ordinary dividend
Strategic report Governance Financial statements Other information
56 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 57
Risk management
Effective risk approach
In an ever-evolving regulatory landscape,
effective risk management and the
accompanying tone from the top is key
for the business to grow sustainably,
reachits strategic goals and deliver
goodcustomer outcomes.”
Karen Goodman
Chief Risk Officer
Regulatory change continues to be a key
areaof focus as we adapt to the constantly
evolving regulatory landscape. We have
integrated and embraced the Consumer
Dutyacross all aspects of our business,
ensuring that positive consumer outcomes
remain central to business practices. We
maintain a constructive and proactive
relationship with the regulator, which has
encompassed responding to information
requests and participating in policy
development discussions. Our risk
management framework and three lines
ofdefence model are firmly established.
Wecontinuously strive to enhance the data
related to our internal control environment,
aiming to provide valuable insights and
supportwell-informed decision making.
Risk strategy
The risk strategy is aligned with the Group’s
high level risk appetite statement, which is:
‘Representing the amount and type of
riskitisprepared to take in the context
ofitsbusiness model and in the course of
achieving its strategic objectives. The Group
takes a measured and balanced approach to
determining where to pursue risk in return
forvalue, in accordance with the Group’s
capability and capacity to identify, report
andmanage risks.’
This statement recognises that for the business
to grow and achieve its strategic aspirations,
and deliver good outcomes for its customers,
effective risk management is essential.
Risk culture
We promote a risk culture that encourages
ownership of and management of risk.
Riskmanagement is the responsibility of
everyone. The diagram to the right depicts
ourrisk culture.
The second line of defence (Risk Team) takes
responsibility for communicating, educating
and advising on the risk management
framework, developing and implementing
computer-based training (CBT) for risk, and
risk-focused cultural improvement initiatives.
The Risk Team carries out ongoing risk
culturalimprovement initiatives to improve
riskawareness across the Group, such as
riskworkshops and risk leadership
breakfastsessions.
The Chief Risk Officer (CRO) provides an
annual assessment of the effectiveness of
the Group’s risk management framework
and Risk Team to the Risk & Compliance
Committee (R&CC).
Risk governance
The Board is ultimately responsible for the
Group’s risk management framework but has
delegated certain responsibilities to the R&CC,
a sub-committee of the Board. The Group
operates a three lines of defence approach
tomanaging risks across theGroup.
The three lines of defence model is
anindustry-recognised approach for
providing structure to the identification and
assessment of risk and testing of the control
environment. The model provides a clear
delineation of responsibilities for all functions
to help ensure that risk management is
effective and embedded across the Group.
This is represented in the governance
structure shown to the right.
Risk appetite
The objective of the Group’s risk appetite
framework is to ensure that the Board and
senior management are actively engaged in
agreeing and monitoring the Group’s appetite
for risk and setting acceptable boundaries for
business activities and behaviours. The risk
appetite categories are reviewed by the Risk
Management Forum (RMF), Executive Risk
Committee (ERC), R&CC and approved by the
Board on an annual basis in line with the
Internal Capital Adequacy and Risk Assessment
(ICARA) and the Group Business Planning
Process (BPP). Accordingly, the risk appetite is
reviewed and updated in line with the Group’s
evolving strategy, operating model, financial
capacity, business opportunities, regulatory
constraints and any other internal or external
factors. Key risk indicators (KRIs) are mapped to
each of the risk appetite categories, with KRI
tolerances aligned to risk appetite. The KRIs
and tolerances are subject to an annual review
process approved by ERC, R&CC and
ultimately by the Board.
1. Tone from the top
The Board sets the tone from the top, in promoting a strong
risk culture. Each Executive Committee (ExCo) member must
instil a strong risk culture in their functional area and ensure
that the policy is effectively and constantly applied within their
area of responsibility.
2. Individual accountability
• Senior management certification regime
• Certified roles
• Consumer Duty outcomes
3. Open communication and challenge
Employees are empowered to raise risks and highlight
anyconcerns.
4. Performance and incentives
Competent risk management must be reflected in
employeeobjectives.
Risk management framework
The risk management framework supports the consistent and robust identification and
management of opportunities and risks across the Group. It can be summarised by the
following diagram.
Risk culture
Risk strategy
Risk governance
Risk culture
Risk appetite
Risk identification
Risk assessment and
management
Risk & control self-
assessment (RCSA)
Risk taxonomy Risk reporting
Combined Assurance Model
(CAM)
Policy governance framework
Internal Capital Adequacy
andRisk Assessment (ICARA)
The following sections provide more detail on the component parts of the Group’s
risk management framework.
1
2
3
4
Executive Risk Committee
Risk Management Forum
Risk governance
Board of AJBell plc
Risk & Compliance Committee
of AJBell plc
Audit Committee
of AJBell plc
1
st
line of defence
Policies and procedures
and Quality Audit (QA)
function
QA, risk
identification,
risk registers,
risk reporting,
risk forums
AJBell plc
policies, procedures
and limits
3
rd
line of defence
Independent assurance
protections
Internal Audit
2
nd
line of defence
In-house assurance
function
Risk and
Compliance
function
Principal components of AJBell combined assurance framework
Strategic report Governance Financial statements Other information
58 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 59
Operational
Risk management
Risk taxonomy
The risk taxonomy details the key areas of risk that the Group is exposed to. These can
be grouped into five Tier 1 risk appetite categories and eighteen Tier 2 ‘sub-level’ risk
appetite categories. Each Tier 2 sub-level risk appetite category has a defined risk
appetite and a risk appetite statement. These are approved by Board and form the
riskappetite framework. This is represented in the diagram below.
Strategic Financial
• Conduct
• People
• Change
• Data
• Financial Control
• Information Security
• Operational Resilience
• Process
• Technology
• Third Party
Management
• Investment
Performance
&Oversight
• Financial Crime
• Legal & Regulatory
• Strategic
• ESG
• Capital
• Credit
• Liquidity
• Market
Tier 1
Tier 2
Operations Conduct
Financial Crime,
Legal & Regulatory
Risk identification
The Group adopts a hybrid top-down and a
bottom-up approach to the identification of
risks. The ExCo and the Board have identified
the principal risks and uncertainties (PR&U)
that could impact the ability of the Group to
meet its strategic objectives. In addition, the
Group maintains a ‘bottom-up’ enterprise
risk register, containing risks mapped to the
Group’s Tier 2 risk appetite categories.
Risk assessment and
management
All of the risks included in the Group risk
register are scored according to probability and
impact and assessed on an inherent basis
(before the impact of controls) and on a
residual basis (after the impact of controls).
Where risks are classed as outside of the
Group’s risk appetite, a risk response must be
determined, comprising either actions to bring
the risk back within appetite, or the acceptance
of the risk for a fixed period of time which
would require approval from the Board.
Risk and control self-
assessment (RCSA)
The Group’s bottom-up assessment of
riskismanaged through the RCSA process
whichsupports an understanding of the risks
and controls in place at the operational and
business process level. Through regular
self-review of the risks and associated controls,
and oversight and escalation of issues as
necessary, the RCSA process enables the risk
and control owners to identify any omissions
in the risk environment and to close any
control gaps or weakness as necessary. RCSAs
are completed on an ongoing basis with a
formal annual RCSA attestation provided by
RMF and ERC members in conjunction with
risk owners.
In addition, the strength of the controls is
considered by the Risk and Compliance and
Internal Audit teams as part of reviews they
carry out under their respective assurance
activities. Any discrepancies between their
assessments and the risk and control owners’
self- assessments are documented in the
reports to ExCo members and the CRO,
together with any actions recommended to
improve those controls. This ensures the risk
remains, or is brought back, within appetite.
Combined assurance model
(CAM)
Internal Audit is responsible for ownership
ofthe CAM.
The purpose of the CAM is to coordinate
thecoverage of risk and control assurance
activities across the Group.
An assessment is made and documented in
the CAM by the second (Risk and Compliance)
and third (Internal Audit) lines of defence as to
the degree of coverage and level of assurance
provided by their reviews, and related work on
the documented business processes and
corresponding controls.
The CAM also helps inform the preparation
of the respective annual Risk, Compliance
and Internal Audit plans.
Risk reporting
Risk reporting is included in the Group’s
CROreport which is presented to ERC and
R&CC. This includes details of underlying
KRIsmapped to the risk appetite categories
and the PR&Us; a summary of all the Group’s
risks and controls; breaches; risk events and
emerging risks.
Similar lower-level and more granular risk
reporting is produced and reviewed at the RMF
and the relevant departmental risk forums.
Policy governance
framework
The policy governance framework
incorporates a central register of policies
including approval categorisation of policies,
review and standardisation of policies, policy
awareness training, policy attestation and
ongoing monitoring of the embedding
ofpolicies.
Internal capital adequacy
andrisk assessment (ICARA)
The Group conducts an ICARA process to
ensure that it has appropriate systems and
controls in place to identify, monitor and,
where proportionate, reduce all potential
material harms that may result from the
ongoing operation of its business. The
Group reviews material harms across
theentirety of the Group’s risk appetite
categories, considering the important
business services identified as per the
Group’s operational resilience framework.
The ICARA process is subject to a robust
governance process to ensure effective
challenge relating to the Group’s assessment
of potential harm scenarios.
Principal risks and
uncertainties
The Board is committed to a continual
processof improvement and embedment
ofthe risk management framework within
theGroup. This ensures that the business
identifies both existing and emerging risks
andcontinues to develop appropriate
mitigation strategies through an effective
internal control environment.
The Board believes that there are a number of potential risks to
theGroup that could hinder the successful implementation of its
strategy. These risks may arise from internal and external events, acts
and omissions. The Board is proactive in identifying, assessing and
managing all risks facing the business, including the likelihood of
each risk materialising in the short or longer term.
The principal risks and uncertainties facing the Group aredetailed below,
along with potential impacts and mitigating actions. The residual risk of
the majority of the Group’s principal risks and uncertainties has remained
stable, however the residual risk has increased for ESG risk, due to
increasing volumes of regulatory change, and liquidity risk, due to the
increased scale and volume of orders being processed. The residual risk
has decreased for people risk due to softening demand in the labour
market and enhancements to recruitment processes and talent
development programmes.
Residual risk direction
Increased Stable Decreased
Risk Potential impact Mitigations
Strategic risk
Strategic risk
The risk that the Group
failstoremain competitive inits
peer group, due to lackof
innovative products and services,
increased competitor activity,
regulatory expectations, and lack
of marketing focus and spend to
keep pace with competitors.
Residual risk direction
• Loss of competitive
advantage, such that AUA and
customer number targets are
adversely impacted. This
would have a negative impact
on profitability.
• Reputational damage as a
result of underperformance
and / or regulatory scrutiny.
The Group regularly reviews its products against competitors, in relation to
pricing,functionality and service, and actively seeks to make enhancements where
necessary to maintain or improve its competitive position in line with the Group’s
strategic objectives.
The Group remains closely aligned with trade and industry bodies, and other policy
makers across our market. The use of ongoing competitor analysis provides insight
and an opportunity to adapt strategic direction in response to market conditions.
ESG risk
The risk that environmental, social
and governance factors could
negatively impact the Group,
itscustomers, investors and
thewider community.
Residual risk direction
• Environmental, physical and
transition risks resulting from
climate change, which may
impact the Group and our
customer’s assets.
• Social risks, include employee
wellbeing and diversity &
inclusion.
• Governance risks, including
the risks related to the Group’s
governance structures being
ineffective, which could
manifest in governance-
related reputational and
conduct risks.
We behave in a responsible manner with a focus on our four responsible business
pillars: responsible propositions, responsible employer, supporting our local
communities and environmental awareness. Further details of our material ESG
risks and our mitigations are disclosed in our Responsible Business report on pages
28 to 45.
ESG-related strategic objectives are incorporated in the Group’s Business Planning
Process (BPP), and a cross functional ESG Working Group is responsible for the
co-ordination of day-to-day ESG-related matters and the delivery of these
objectives. The Group operates a robust ESG governance framework, further
details of which are included on page 29 of our Responsible Business report.
Strategic report Governance Financial statements Other information
60 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 61
Principal risks and uncertainties
Residual risk direction
Increased Stable Decreased
Risk Potential impact Mitigations
Operational risk
Legal & regulatory risk
The risk that the Group fails to
comply with regulatory and legal
standards.
Residual risk direction
• Regulatory censure and / or
fines, including fines from the
FCA and Information
Commissioner’s Office (ICO).
• Related negative publicity could
reduce customer confidence
and affect ability to generate
positive net inflows.
• Poor conduct could have an
adverse impact on customer
outcomes.
The Group maintains a strong compliance culture geared towards positive
customer outcomes and regulatory compliance.
The Group performs regular horizon scanning to ensure all legislative and
regulatory change is detected and highlighted to the Group for consideration.
The Group maintains an open dialogue with the FCA and actively engages with
them on relevant proposed regulatory change.
The Compliance function is responsible for ensuring all standards of the
regulatory system are being met by the Group. This is achieved by implementing
policies and procedures across the business, raising awareness and maintaining
an effective control environment. Compliance performs a rolling programme of
risk-prioritised reviews to ensure compliance standards have been embedded
into the business.
Information security
risk
The risk of a vulnerability in the
Group’s infrastructure being
exploited or user misuse that
causes harm to service, data and /
or an asset causing material
business impact.
Residual risk direction
• Information security breaches
could adversely impact
individuals’ data rights and
freedoms and could result in
fines / censure from regulators,
such as the ICO and FCA.
• Failure to maintain or quickly
recover operations could lead
to intolerable harm to
customers and the Group.
• The Group could suffer
damage to its reputation,
eroding trust and making it
difficult to attract and retain
customers, employees,
partners, and investors.
The Group continually reviews and evolves its cyber security position to ensure
that it protects the confidentiality, integrity and availability of its network and the
data that it holds.
A defence in depth approach is in place with firewalls, web gateway, email
gateway and anti-virus amongst the technologies deployed. Staff awareness is
seen as being a key component of the layered defences, with regular updates,
training and mock phishing exercises.
Our security readiness is subject to independent assessment by a penetration
testing partner that considers both production systems and development
activities. This is supplemented by running a programme of weekly vulnerability
scans to identify configuration issues and assess the effectiveness of the software
patching schedule.
The Group regularly assesses its maturity against an acknowledged security
framework, which includes an ongoing programme of staff training and
assessment through mock security exercises.
Data risk
Data risk is defined as the potential
threats and vulnerabilities that can
compromise the confidentiality,
integrity, availability, and
compliance of sensitive or
valuable data within the Group
and its third-party suppliers. This
risk encompasses the possibility
of unauthorised access, loss, theft,
alteration, or exposure of data.
Residual risk direction
• A data breach could adversely
impact individuals’ data rights
and freedoms and could result in
fines / censure from regulators,
such as the ICOand FCA.
• A data breach could result in
financial loss due to the cost
ofinvestigating the breach,
notifying impacted individuals,
and implementing remediation
measures.
• The Group could suffer
damageto its reputation,
eroding trust and making it
difficult to attract and retain
customers, employees,
partners,and investors.
The Group monitors the adequacy of its data governance framework via the
DataForum.
The Group has data protection policies and procedures, and security controls to
protect data such as encryption, access controls and monitoring.
The Group educates employees about data privacy, security and the importance
ofprotecting sensitive data.
The Group conducts regular data audits to identify and address potential
securityrisks.
The Group’s Data Protection Officer / CRO provides an assessment of the adequacy
of the Group’s data protection framework as part of the annual DPO report.
Risk Potential impact Mitigations
Operational risk continued
Financial crime risk
The risk of failure to protect
theGroup and its customers
fromall aspects of fraud and
financial crime, including
anti-money laundering, terror
financing, proliferation financing,
sanctions restrictions, market
abuse, fraud, cyber-crime and
thefacilitation of tax evasion.
Residual risk direction
• The Group may be adversely
affected, including regulatory
censure or enforcement, if we
fail to mitigate the risk of being
used to facilitate any form of
financial crime.
• Potential customer detriment as
customers are at risk of losing
funds or personal data, which
can subject them to further loss
via other organisations.
• Fraudulent activity leading
toidentity fraud and / or loss
ofcustomer holdings to
fraudulent activity.
• The Group could suffer
damageto its reputation,
eroding trust and making it
difficultto attract and retain
customers, employees,
partners, and investors.
Extensive controls are in place to minimise the risk of financial crime.
Policies and procedures include: mandatory financial crime training in anti-money
laundering and counter terrorist financing, fraud, market abuse and the Criminal
Finances Act (2017) to aid the detection, prevention and reporting of financial
crime. TheGroup has an extensive recruitment process in place to screen
potentialemployees.
The Group actively maintains defences against a broad range of likely attacks by
global actors, bringing together tools from well-known providers, external
consultancy and internal expertise to create multiple layers of defence. The latter
includes intelligence shared through participation in regulatory, industry and
national cyber security networks.
Third-party
management risk
The risk that a third-party provider
materially fails to deliver the
contracted services.
Residual risk direction
• Loss of service from a third-party
provider could have a negative
impact on customer outcomes
due to website unavailability,
delays in receiving and / or
processing customer
transactions or interruptions
tosettlement and reconciliation
processes.
• Financial impact through
increased operational losses.
• Regulatory fine and / or censure.
To mitigate the risk posed by third-party suppliers, the Group conducts
onboarding due diligence and monitors performance against documented
service standards to ensure their continued commitment to service, financial
stability and viability. Performance metrics are discussed monthly with
documented actions for any identified improvements.
This is supplemented by attendance at formal user groups with other clients of
the key suppliers, sharing experience and leveraging the strength of the user base.
Where relevant and appropriate, annual financial due diligence on critical
suppliers and on-site audits are also undertaken.
Technology risk
The risk that the design,
implementation and management
of applications, infrastructure and
services fail to meet current and
future business requirements.
Residual risk direction
• The reliance on evolving
technology remains crucial to
the Group’s effort to develop its
services and enhance products.
Prolonged underinvestment in
technology will affect our
ability to serve our customers
and meet their needs.
• Failing to deliver and manage
afit-for-purpose technology
platform could have an adverse
impact on customer outcomes
and affect our ability to attract
new customers.
• Technology failures may
leadtofinancial or regulatory
penalties, and reputational
damage.
The Group continues to implement a programme of increasing annual
investment in the technology platform. This is informed by recommendations
that result from regular architectural reviews of applications and of the
underpinning infrastructure and services.
Daily monitoring routines provide oversight of performance and capacity,
whichsupports our operational resilience risk management activities.
Our rolling programme of both business continuity planning and testing, and
single point of failure management, maintains our focus on the resilience of key
systems in the event of an interruption to service.
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62 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 63
Principal risks and uncertainties
Residual risk direction
Increased Stable Decreased
Risk Potential impact Mitigations
Operational risk continued
Operational resilience
risk
The risk that the Group does not
have an adequate operational
resilience framework to prevent,
adapt, respond to, recover and
learn from operational
disruptions.
Residual risk direction
• Failure to maintain or quickly
recover operations could lead
to intolerable harm to
customers and the Group.
• Operational resilience
disruptions may lead to financial
or regulatory penalties, and
reputational damage.
The Group has developed a comprehensive operational resilience framework,
under the direction of the Operations sub-committee of ExCo. The R&CC and
Board also provide oversight.
An annual operational resilience self-assessment document is reviewed by the
Board and R&CC. The Group’s Risk Team provides a second line of defence review
of the operational resilience self-assessment.
During FY24, a successful group-wide disaster recovery exercise was carried
out,allowing the business to operate for a week on a cloud-based disaster
recoveryplatform.
Process risk
The risk that, due to unexpectedly
high volumes, the Group is unable
to process work within agreed
service levels and / or to an
acceptable quality for a
sustainedperiod.
Residual risk direction
• A decline in the quality of
workwill have a financial
impactthrough increased
operational losses.
• Unexpectedly high volumes
coupled with staff recruitment
and retention issues could lead
to poor customer outcomes
and reputational damage.
There is an ongoing programme to train staff on multiple operational functions.
Diversifying the workforce enables the business to deploy staff when high work
volumes are experienced. Causes of increased volumes of work, for example
competitor behaviour, are closely monitored in order to plan resources effectively.
The Group focuses on increasing the effectiveness of its operational procedures
and, through its business improvement function, aims to improve and automate
more of its processes. This reduces the need for manual intervention and the
potential for errors.
Change risk
The risk of potential negative
consequences and uncertainties
associated with introducing
modifications, alterations, or
adjustments to established
processes or systems.
Residual risk direction
• Operational resilience
disruptions resulting from
crystallisation of change risk
maylead to financial or
regulatory penalties, and
reputational damage.
• Change can increase costs
ifnotdelivered within budget
orintroduce complexity to
endusers due to a lack
ofcompatibility with
existingsystems.
• Reduced quality because of a
change can lead to customer
dissatisfaction, rework, and
additional costs.
• An inability to deliver change can
result in reputational damage to
the Group, making it difficult to
attract customers and talent.
All operational and regulatory change is prioritised, captured, and monitored
through the Operations sub-committee of ExCo.
Technical change is prioritised, captured, and monitored within Technology
Services and through associated Committees.
Product Change is managed within the Product areas and overseen by the
corresponding Proposition Committee.
Financial control
environment risk
The risk that the financial control
environment is weak. This includes
the risk of loss to the business, or
its customers, because of either
the actions of an associated
third-party or the misconduct
ofan employee.
Residual risk direction
• Reputational damage with
regulators, leading to increased
capital requirement.
• Potential customer detriment
resulting from inadequate
protection of customer assets.
• Increased expenditure in order
to compensate customers for
loss incurred.
The Group’s financial control and fraud prevention policies and procedures are
designed to ensure that the risk of fraudulent access to customer or corporate
accounts is minimised.
Anti-fraud training is provided to all members of staff who act as first line of
defence to facilitate early detection of potentially fraudulent activity.
Strong technology controls are in place to identify potential money laundering
activity or market abuse.
Risk Potential impact Mitigations
Operational risk continued
Conduct (consumer
outcomes) risk
The risk that the fair treatment of
customers is not central to the
Group’s corporate culture.
Residual risk direction
• Poor conduct could have an
adverse impact on customer
outcomes.
• Reputational damage resulting
from poor levels of customer
service.
• The Group may be adversely
affected, including regulatory
censure or enforcement.
Delivering good customer outcomes is core to our purpose, business model,
strategy and guiding principles. This drives the culture and objectives of the
business and ensures customers remain at the heart of everything we do.
The Group enhanced its conduct controls to align with the requirements of the
Consumer Duty. These include training and education, product governance, and
ongoing monitoring arrangements, and provide the ExCo and Board assurance
on the delivery of good customer outcomes.
People risk
The risk that the Group fails to
attract, retain, develop and engage
employees who are aligned to the
Group’s Guiding Principles.
Residual risk direction
• Difficulties in recruiting the
right, culturally aligned, people
to work for the Group.
• Existing employees who are
not motivated, do not perform
well and may impact the quality
and effectiveness of the
services provided to the
Group’s customers.
• Talented employees who are
not appropriately developed
and / or have limited
opportunities to progress are
likely to leave the Group.
• Resource shortfalls may impact
quality and service and could
lead to poor service /
consumer outcomes and
reputational damage.
The Group has improved its recruitment processes to attract the best people
possible to join the Group.
The AJBell Way and Guiding Principles are embedded into our culture through
people policies, procedures, and training.
The Group undertakes a staff engagement survey at least annually and uses this
feedback to address any areas for improvement to ensure staff engagement
remains high.
The Group conducts regular reviews of its employee remuneration packages to
ensure it is competitive.
The Group operates talent development programmes for management and
leadership roles.
Investment
performance and
oversight risk
The risk the Group fails to make
effective decisions in relation to its
discretionary investment activities
and maintain strong governance
processes.
Residual risk direction
• Outflows or loss of assets
under management as a result
of poor or unexpected
performance, which would
reduce investment
management revenues.
• Potential customer detriment,
such as the loss of investment
value or inaccessibility of assets
due to poor liquidity.
• Reputational damage resulting
from inadequate oversight or
governance arrangements.
The Group maintains robust Investment Governance arrangements in relation to
the investment activities associated with AJBell Asset Management’s products
and services. The performance of these products and services is monitored onan
ongoing basis for alignment with customer expectations and investment
mandates, including through dedicated forums and by the second line of defence
Risk Team.
A dedicated Investment Committee which is a sub-committee of ExCo, includes
two independent committee members and provides oversight of investment
management activities.
Strategic report Governance Financial statements Other information
64 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 65
Principal risks and uncertainties
Residual risk direction
Increased Stable Decreased
Risk Potential impact Mitigations
Financial risk
Market risk
The risk that a significant and
prolonged capital market or
economic downturn has an
adverse effect on customer
confidence, asset values and
interest rates.
Residual risk direction
• Adverse effect on customer
transactional activity or ad
valorem fees generated from
assets under administration
from which the Group derives
revenue. Sensitivities for
interest rate and market
movements are shown in
note25 to the consolidated
financial statements.
The Group’s products are targeted at UK residents. We do not do business in any
other countries and have relatively few customers outside the UK. Therefore, in the
event that the economy falls into a prolonged recession, this may impact contribution
levels and confidence generally in the savings and investment markets. The Directors
believe that the Group’s overall income levels and in particular the balance between
the different types of assets and transactions from which that income is derived,
provide a robust defensive position against a sustained economic downturn.
Revenue from retained interest income is derived from the pooling of customer
cash balances.
The Group has a variety of transactional and recurring revenue streams, some
ofwhich are monetary amounts while others are ad valorem. This mix of revenue
types helps to limit the Group’s exposure to interest rate fluctuations and capital
market fluctuations.
Capital risk
The risk that the Group does not
maintain sufficient capital resources
to cover unexpected losses.
Residual risk direction
• Inability to cover unexpected
losses.
• Additional regulatory scrutiny
and potential for increased
regulatory capital resource
requirements.
The Group adopts a cautious and controlled approach to managing its capital risk.
The Group conducts an Internal Capital and Risk Assessment (ICARA) process
aligned with its risk management framework to identify, monitor and mitigate
potential harms.
Where harms can not be mitigated, the Group holds capital to cover potential
unexpected losses (its capital resource requirement). The Group’s capital risk
appetite is to maintain its capital resources at greater than 125% of the Group’s
capital resource requirement.
Credit risk
The risk of potential failure of
clients, market counterparties or
banks used by the Group to fulfil
contractual obligations.
Residual risk direction
• Unintended market exposure.
• Customer detriment.
The Group’s credit risk extends principally to its financial assets: cash balances held
with banks and trade and other receivables. The Group carries out initial and ongoing
due diligence on the market counterparties and banks that it uses, and regularly
monitors the level of exposure.
The Group continues to diversify across a range of approved banking counterparties,
reducing the concentration of credit risk as exposure is spread over a larger number
of counterparties. The banks currently used by the Group are detailed in note 25 to
the consolidated financial statements.
With regard to trade receivables, the Group has implemented procedures that
require appropriate credit or alternative checks on potential customers before
business is undertaken. This has minimised credit risk in this area.
The Group will maintain its existing strategy of diversification to ensure acceptable
exposure across a wide range of well-capitalised banks with appropriate credit ratings.
It will continue to regularly monitor its level of exposure and to assess the financial
strength of its banking counterparties.
Liquidity risk
The risk that the Group suffers
significant settlement default or
otherwise suffers major liquidity
problems or issues of liquidity
deficiency which severely impact
the Group’s reputation in
themarkets.
The risk that the Group does not
have available readily realisable
financial resources to enable it to
meet its obligations as they fall due
or can only secure such resources
at excessive cost.
Residual risk direction
• Reputational damage.
• Potential customer detriment.
• Financial loss.
• Inability to meet obligations as
they fall due.
The Group has robust systems and controls and monitors all legal entities to ensure
they have sufficient funds to meet their liabilities as they fall due.
The Group continues to monitor trade settlement on both an intra-day and daily
basis, and we continue to assess opportunities to strengthen our internal control
environment.
The Group continues to be a highly cash-generative business and to maintain
sufficient cash and standby banking facilities to fund its foreseeable trading
requirements.
Viability statement
In accordance with provision 31 of the UK
Corporate Governance Code 2018, the Board
has assessed the viability of the Group,
considering a four-year period to September
2028. The Board considers a four-year
horizon to be an appropriate period to assess
the Group’s strategy and its capital
requirements, considering the investment
needs of the business and the potential risks
that could impact the Group’s ability to meet
its strategic objectives.
This assessment has been made by
considering the Group’s financial position and
regulatory capital and liquidity requirements
in the context of its business model, strategy
and four-year financial forecasts and in
consideration of the principal risks and
uncertainties, as detailed in the Strategic
report on pages 61 to 66. The principal
risksand uncertainties are those that may
adversely impact the Group based on its
business model and strategy and are derived
from both the Group’s business activities and
the wider macroeconomic environment in
which the Group operates but does
notcontrol.
As an FCA-regulated entity, as part of its
Internal Capital and Risk Assessment (ICARA)
the Group is required to use stress testing of
the business model and strategy to identify
whether it holds sufficient own funds and
liquid assets. Forward-looking hypothetical
stress testing scenarios have been
determined by considering potential
macroeconomic and idiosyncratic events
that would have a significant adverse impact
on the Group’s ability to generate profits, and
therefore maintain the existing levels of own
funds and liquid assets, over the business
planning period.
The Board-approved four-year financial
forecast assumes the business continues to
grow customer numbers and AUA through
investment in our brand, product
propositions, technology and people. The
financial forecasts assume that the Bank of
England base interest rate will continue to
gradually fall throughout the forecast period,
in line with market projections. There are no
significant market movements in underlying
asset values based on the position at the point
the projections were approved by the Board.
The Board has considered the potential
impact of three stress test scenarios, which
cumulatively represent a severe, remote but
plausible scenario:
1) Macroeconomic (Market risk) –
asignificant reduction in equity market
values, based on the 2008–09 global
financial crisis. Asset values fall by 40% in
year one, recovering to 20% below the
level they were prior to the fall in year
two, and remain flat in years three
andfour.
2) Macroeconomic (Market risk) –
BankofEngland base interest rate
reduced to 0.50% over a 15-month
period leading to a lower interest rate
retained on customer cash balances.
3) Idiosyncratic (Technology risk,
Third-party management risk) –
prolonged IT issues with key operating
software suppliers cause significant
damage to AJBell’s service and
reputation, which results in a reduction in
customers. Following year one the Group
incurs development and licence costs to
upgrade or replace key components of
the platform software, with service levels
and net inflows returning to normal in
year three.
The Board has identified a number of
potential management actions that could be
taken in the event the modelled scenarios
crystallise. The action selected would be
dependent upon the nature of the scenario.
The results have confirmed that the Group
would be able to withstand the adverse
financial impact of these three scenarios
occurring simultaneously over the four-year
assessment period. This assumes that
dividends and share buybacks are paid in
linewith the recommendation made in the
30September 2024 annual report and with
theGroup capital allocation framework on a
forward-looking basis. During the period, the
Group continues to retain surplus financial
resources over and above its regulatory capital
and liquidity requirements, with or without any
management remediation actions.
The Group’s strategy and four-year financial
forecasts were approved by the Board in
September 2024. The Directors confirm that
they have a reasonable expectation that the
Group will be able to continue in operation
and meet its liabilities as they fall due over the
four-year period ending September 2028.
The Strategic report was approved bythe Board of Directors and signed on its behalf by:
Michael Summersgill
Chief Executive Officer
4 December 2024
Strategic report Governance Financial statements Other information
66 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 67
AnsweredQuestions
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Customer Service Team is just a phone
callaway to help support our customers
andadvisers with any questions they may have.
Ourknowledgeable, experienced and dedicated
teams are a key driver behind our high
customer retention and referral rates.
I had the pleasure of working with AJ Bell
to set up a SIPP, and I couldn’t be more
impressed with the service they provided.
They were exceptionally knowledgeable,
guiding me through the entire process
with ease and clarity. They went above
and beyond to make sure I felt confident
and comfortable with the decisions I was
making. I highly recommend AJ Bell for
their professionalism and dedication to
providing top-notch service.”
Ruth Cockburn
AJ Bell customer
Making investing easy
Strategic report
Governance
Financial statements Other information
AJ Bell plc Annual Report and Accounts 2024 6968 AJ Bell plc Annual Report and Accounts 2024
Board gender
Men
50%
Women 50%
Board ethnicity
Ethnic minority 10%
White 90%
Board composition
Executive Directors
30%
Chair 10%
Independent Non-Executive
Directors
50%
Non-Independent
Non-Executive Director
10%
Chair’s introduction
We continue to build our corporate
governance structure to guide, support
and constructively challenge the
ExecutiveManagement Team on
thedevelopment and delivery of the
strategyand change programmes.”
Fiona Clutterbuck
Chair
Dear shareholder
I am pleased to present the Governance report for the financial year
ended 30 September 2024.
This year has been another busy year for the Board. We remain
committed to maintaining high standards of corporate governance
and a robust framework for the control and management of AJBell in
the best long-term interests of all its stakeholders.
Below are some of the key highlights of this year. Further details of
how we have discharged our corporate governance responsibilities
are set out later in this report.
Board activities
The key items on the Board agenda this year have included:
oversightof the implementation of Consumer Duty and approval
ofthe first Consumer Duty annual assessment; consideration of the
recommendations resulting from the external board effectiveness
review; modernisation of the dividend policy and capital allocation
framework; and evaluating the composition and succession plan for
the Board and its sub-committees. We hold two strategy days each
year with the ExCo to discuss in depth the longer-term business
strategy and our three-year business plan and its alignment with
ourchange programmes and strategic priorities.
More information on our Board’s activities and key decisions can be
found on page 77.
Board and Executive Committee changes
At the end of 2023, we were pleased to announce the appointment of
Fiona Fry as a Non-Executive Director with effect from 7 December 2023.
Fiona brings to the Board a wealth of financial services and regulatory
experience. She assumed the role of Chair of the Risk & Compliance
Committee on 31 March 2024 to succeed Simon Turner, who completed
nine years’ service, and retired from the Board on thisdate.
We also welcomed Julie Chakraverty as a Non-Executive Director on
1June 2024. Julie has a wealth of experience in the financial services,
consumer and cyber sectors that will be invaluable to the Board as we
continue to focus on our strategic priorities. Following these changes,
the Nomination Committee considered the composition of each of the
Board Committees and as a result a number of changes were made with
effect from 11 July 2024.
In September, we announced that Roger Stott, Chief Operating
Officer (COO) will be retiring and stepping down from the Board as
an Executive Director on 31 December 2024. Roger joined AJBell in
2008 and was appointed to the Board as COO in August 2021. During
his time with the Company, Roger has played a significant role in the
success of the business. We wish to thank him for his outstanding
contribution to the Board and the Company over many years and
wish him well for the future.
The Chief Financial Officer (CFO), Peter Birch, and Chief Technology
Officer, Mo Tagari, will assume the FCA Senior Manager Function
responsibilities of the Chief Operations Function (SMF 24) subject to
regulatory approval. Peter continues to serve on the Board as an
Executive Director having been appointed as CFO in 2022.
At executive level, we are pleased to report the internal promotion
ofCharlie Musson to the role of Managing Director, D2C and as a
member of the ExCo with effect from 22 May 2024. Charlie, who had
been with us for eight years as PR Director and more recently Acting
Managing Director, D2C, has extensive knowledge of our business
and the industry and has been a member of the ExCo for a number
ofmonths in his role as Acting Managing Director, D2C. We are also
pleased to report that following a competitive selection process,
Ryan Hughes was appointed to the position of Managing Director,
AJBell Investments and as a member of the ExCo with effect from
10October 2024. Ryan, who joined the business in 2016, has been
serving in this role on an interim basis since late 2023.
Further details of changes in the year are set out in the Nomination
Committee report on pages 84 to 87.
Board effectiveness review
This year, we undertook an externally facilitated review of the
effectiveness of the Board and its Committees. The review confirmed
that the Board and its Committees are operating effectively. The
Board adopted the recommendations from the findings and has
developed a plan to implement the actions.
Further details on the review process and recommendations to the Board
can be found on pages 80 to 82.
Inclusion and diversity
The Board is committed to a diverse workforce and continues to
focuson increasing diversity on our Board and at all levels across the
Company. We recognise the significant benefits that come with having
a diverse Board and I am pleased to report that we have exceeded the
FTSE Women Leaders and the FCA Listing Rules requirement on
gender diversity. We have met the ethnic diversity requirement of the
FCA Listing Rules and the Parker Review. We believe, however, that
diversity needs to look much wider than gender and ethnicity to
include variations in experience, skills, cognitive thinking and
background whilst all Board appointments are made on merit.
Engagement with our stakeholders
We proactively engage with, and listen to, our stakeholders to
understand what is important to them. By understanding our
stakeholders, we can factor into boardroom discussion the potential
impact of our decisions and consider their needs and interests. Further
details on how we have engaged with our stakeholders are set out in
our Strategic report on pages 24 and 25 and the Responsible Business
report on pages 28 to 45. Our Section 172 statement, which sets out
some examples of how the Board has considered the interests of
ourkey stakeholders whilst making key decisions, can be found
onpages 26 and 27.
Meeting attendance
Board
Audit
Committee
Risk &
Compliance
Committee
Remuneration
Committee
Nomination
Committee
Fiona Clutterbuck 10/10 – 5/5 4/4 6/6
Evelyn Bourke
1
10/10 5/5 4/4 1/1 6/6
Eamonn Flanagan
2
10/10 5/5 – 3/4 5/6
Margaret Hassall
3
10/10 4/4 1/1 5/5 6/6
Fiona Fry
4
6/7 1/1 4/4 2/3 –
Julie Chakraverty
5
3/4 1/1 1/1 1/1 –
Les Platts 10/10 – – – –
Simon Turner
6
4/4 – 2/2 1/1 –
Michael Summersgill 10/10 – – – –
Peter Birch 10/10 – – – –
Roger Stott 10/10 – – – –
1. Evelyn Bourke stepped down from the Risk & Compliance Committee and was appointed as a member of the Remuneration Committee on 11 July 2024.
2. Eamonn Flanagan stepped down from the Remuneration Committee on 11 July 2024 and apologies were received for Remuneration Committee and Nomination Committee ad hoc
meetings on 22 May arranged at short notice.
3. Margaret Hassall stepped down from the Audit Committee and was appointed as a member of the Risk & Compliance Committee on 11 July 2024.
4. Fiona Fry was appointed to the Board and as a member of the Risk & Compliance Committee on 7 December 2023. She assumed her role as Chair of the Risk & Compliance Committee
on 31 March 2024 and as a member of the Remuneration Committee and Audit Committee on 22 May 2024 and 11 July 2024 respectively. Apologies were received for the 30 January
2024 Board meeting due to commitments prior to appointment. She was unable to attend a Remuneration Committee meeting that was arranged at short notice.
5. Julie Chakraverty was appointed to the Board on 1 June 2024 and was appointed as a member of the Audit Committee, Risk & Compliance Committee and Remuneration Committee
on 11 July 2024. Apologies were received for an ad hoc Board meeting arranged at short notice.
6. Simon Turner stepped down from the Board, Risk & Compliance Committee and Remuneration Committee on 31 March 2024.
The Annual General Meeting
Our next Annual General Meeting (AGM) will be held at the Company’s
offices, 4 Exchange Quay, Salford Quays, Manchester, M3 5EE on
29January 2025. Together with my fellow Directors, I look forward to
meeting shareholders, and we welcome your feedback and questions
on that occasion and, indeed, at any stage during the year.
The year ahead
The Board is responsible for setting and maintaining high standards of
corporate governance. We have an established and effective governance
framework and we will continue to embrace the best governance
practices to enable us to deliver great value products and outstanding
service to our customers and their advisers for the benefit of our
widerstakeholders.
Fiona Clutterbuck
Chair
4 December 2024
Board tenure
Fiona Clutterbuck 1 year
Michael Summersgill 13 years
Peter Birch 2 years
Roger Stott 3 years
Evelyn Bourke 3 years
Eamonn Flanagan 6 years
Margaret Hassall 3 years
Fiona Fry Less than 1 year
Julie Chakraverty Less than 1 year
Les Platts
1
1 year
1. Les Platts previously served on the Board as a Non-Executive Director from 2008
to 2014 and then as Chair from 2014 to 2022.
Strategic report Governance Financial statements Other information
70 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 71
Board of directors
N
C
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D N
A
R
N
R
C

D N
A
D
A
R
C

A
R
C

Fiona Clutterbuck
Chair
Appointed: May 2023
Skills and expertise:
Fiona brings to the Board extensive experience in
corporate governance, corporate finance and an
understanding of good customer outcomes.
Fiona qualified as a barrister and gained a wealth
of knowledge in strategy, corporate finance, and
investments during her roles as Head of Strategy,
Corporate Development and Communications at
Phoenix Group plc, and Managing Director at ABN
AMRO Investment Bank plc, HSBC Investment
Bank plc and Hill Samuel. Fiona was previously the
Chair of Paragon Banking Group plc, Interim Chair
and Senior Independent Director at M&G plc and
Non-Executive Director of Hargreaves Lansdown
plc, W.S Atkins and Sampo plc.
Current key external appointments:
Non-Executive Director and Chair of the
Remuneration Committee at The Co-Operative
Bank plc, Non-Executive Director at The
Co-Operative Bank Finance plc and The
Co-Operative Bank Holdings plc.
Roger Stott
Chief Operating Officer
Appointed to current role: October 2021
Skills and expertise:
Roger is a qualified chartered accountant
withextensive experience within the financial
services sector having held a number of senior
in-house finance roles and specialising in retail
stockbroking for over 20 years with a number of
firms. Roger joined AJBell in July 2008 and has
since held a wide range of roles, including Group
Finance Director and Chief Risk Officer, before
being appointed as Chief Operating Officer in
October 2021, a role which includes responsibility
for Customer Services, Operations and the
delivery of related key projects. Roger brings
in-depth knowledge of the financial and
operational activities of the business and its risk
management and related governance practices.
Michael Summersgill
Chief Executive Officer
Appointed to current role: October 2022
Appointed to Board: May 2011
Skills and expertise:
Michael joined AJBell in 2007 and was appointed
as CFO in 2011. His role gradually broadened as
he assumed responsibility for the operational
functions of the Group. During his time as CFO,
Michael led a number of key change initiatives,
helping to develop AJBell into one of the UK’s
leading investment platform businesses. Michael
became Deputy CEO in 2021, a role in which he
focused on developing the strategy and
organisational structure of the Group, before
being appointed as CEO in October 2022. Michael
brings to the Board clear strategic leadership and
has a thorough understanding of AJBell’s
business model and market.
Evelyn Bourke
Non-Executive Director and
SeniorIndependent Director
Appointed: July 2021
Skills and expertise:
Evelyn qualified as an actuary and has an MBA from
London Business School. She brings to the Board
extensive experience in finance, strategy and
general management having held a number of
CEO and CFO roles during her executive career.
Whilst CEO and CFO at Bupa Group, she oversaw
transformative change including acquisitions and
disposals. Evelyn previously served as a Non-
Executive Director of the Children’s Mutual and IFG
Group plc. Her previous experiences as CFO at
Standard Life Assurance and Friends Life, and on
the Board of IFG Group plc, provided her with
significant understanding of platform services,
pensions administration and financial advice.
Current key external appointments:
Non-Executive Director at Marks and Spencer
Group plc and Chair of Audit and Risk Committee,
Non-Executive Director at Bank of Ireland Group
plc, Non-Executive Director at Admiral Group plc,
Chair at Genesis Care UK and Non-Executive
Director at Genesis Care Cayman Holdings Limited.
Margaret Hassall
Non-Executive Director
Appointed: September 2021
Skills and expertise:
Margaret brings to the Board expertise in finance,
risk, and strategy from her successful career in
financial and professional services. Having spent
seven years as a consultant for Deloitte and leading
the financial services consulting business for
Charteris, Margaret brings commercial strength
and experience in leading transformational change.
Margaret gained significant financial services
insight during her roles as Chief Operations Officer
and Chief Information Officer for divisions within
some of the World’s largest banks, including Bank
of America, and Royal Bank of Scotland. She is a
former Non-Executive Director of OneSavings
Bank plc and Nucleus Financial Group plc.
Current key external appointments:
Non-Executive Director at Kier Group plc and
Chair of the Remuneration Committee.
Les Platts
Non-independent
Non-Executive Director
Appointed: July 2023
Skills and expertise:
Les qualified as a chartered accountant and
hasexpertise in financial, governance and risk
matters, having advised FTSE 100 and FTSE 250
clients during his executive career. Les has a vast
understanding of the operations and business
model of the Group having been appointed to
AJBell as Non-Executive Director in 2008 and
Chair from 2014 until 2022. In July 2023, Les was
appointed to the Board as Representative Director
of AJBell for Andy Bell, former CEO, co-founder
of the Company and, together with his connected
persons, the Company’s largest shareholder.
During his 33-year career at Deloitte LLP, Les held
a wide range of roles including audit partner,
North-East senior partner and UK board member.
Les is a former director and Vice Chair of Leeds
Building Society and the former Honorary
Treasurer of Lancashire County Cricket Club.
Peter Birch
Chief Financial Officer
Appointed: July 2022
Skills and expertise:
Peter is a qualified chartered accountant
andbrings to the Board financial expertise
andcommercial strength. As CFO, he has
responsibility for the financial management
ofthebusiness and for leading engagement
withthe Group’s key shareholders. Prior to joining
AJBell, Peter was a Financial Services Audit and
Assurance Partner at Deloitte LLP (‘Deloitte’) and
was the lead audit partner for several large listed
financial services organisations. He also led
Deloitte’s financial services audit and assurance
practice in the UK regions from 2017 to 2021.
Eamonn Flanagan
Non-Executive Director
Appointed: March 2018
Skills and expertise:
Eamonn is a qualified actuary with significant
experience analysing business and financial models
of companies across financial services. He brings a
wealth of expertise in responding to regulation,
market conditions and developing strategic focus
whilst delivering strong customer outcomes.
Eamonn was the Director and Head of European
Insurance at ING Barings before co-founding an
investment bank, Shore Capital Markets Limited,
where he was appointed as Director. Eamonn was
previously a Non-Executive Director, Chair of the
Investment Committee and Chair of the
Remuneration, Nominations and Governance
Committee at R&Q Insurance Holdings Ltd.
Current key external appointments:
Non-Executive Director at Chesnara plc and
Chairof the Remuneration Committee, Chair at
Movestic Livforsakring AB.
Julie Chakraverty
Non-Executive Director
Appointed: June 2024
Skills and expertise:
Julie brings to the Board extensive experience in
finance, entrepreneurship and innovation having
served on the boards of listed financial services
companies, whilst successfully founding Rungway
Limited, an employee engagement and mentoring
platform. During her executive career, Julie worked
in derivatives at JP Morgan Chase and held several
global leadership positions at UBS Investment Bank,
where she led the development of a technology
product that won industry awards for innovation.
Julie has served as a Non-Executive Director at
Santander UK plc, Aberdeen Asset Management and
Standard Life Aberdeen plc (now abrdn plc), Amlin
plc (now Mitsui Amlin) and Spirit Pub Company plc
(now Greene King).
Current key external appointments:
Non-Executive Director and Senior Independent
Director at NCC Group plc, Non-Executive
Director, Chair of the Ethics and Sustainability
Committee, and Consumer Duty Champion at
Starling Bank Limited.
Fiona Fry
Non-Executive Director
Appointed: December 2023
Skills and expertise:
Fiona is a qualified chartered accountant and
highly experienced risk professional and brings to
the Board a deep knowledge of the UK regulatory
landscape for financial services. Fiona spent
mostof her executive career at KPMG where, as
partner, she focused on consumer and conduct
issues, including governance, risk management
and culture, primarily in the financial sector. Fiona
also held the role of Head of Investigations at the
Investment Management Regulatory Organisation
and Financial Services Authority. During the
financial year Fiona also acted as Board Advisor
for Revolut Limited.
Current key external appointments:
Non-Executive Director and Chair of the Board
Risk Committee at Aviva Insurance Limited,
Non-Executive Director and Consumer Duty
Champion at Revolut NewCo UK Ltd.
Board changes during
the financial year
With effect from 31 March 2024,
Simon Turner stepped down
fromtheBoard having served as a
Non-Executive Director since July
2014. During the year, Fiona Fry and
Julie Chakraverty joined the Board as
Non-Executive Directors with effect
from 7 December 2023 and 1 June
2024, respectively.
The skills and expertise
of the Board
The demographics of the members
ofa board have a significant impact
onits effectiveness, therefore an
appropriate balance of skills and
expertise must be maintained. The
breadth of skills and expertise on the
Board includes key areas such as listed
environments, financial services,
finance and accountancy, financial
services regulation, retail stock
broking, global banking, risk
management, and technology.
N
Nomination Committee
A
Audit Committee
D
Disclosure Committee
R
Remuneration Committee
C
Risk & Compliance Committee
Committee Chair
Strategic report Governance Financial statements Other information
72 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 73
Corporate Governance report
UK Corporate Governance Code – Compliance Statement
AJBell continues to be committed to high standards of corporate governance and adopts the UK Corporate Governance Code 2018
(the“Code”). The Code is available on the Financial Reporting Council website at frc.org.uk.
The table below sets out the details of the principles of the Code and references where to read how AJBell has fully complied with them
during the financial period ending 30 September 2024.
Section Code Principles
Where to read about how
AJBell has complied
1
Board leadership
and Company
purpose
A An effective board promoting long-term success for the company and
contributing to society
Pages 75 to 77
B Purpose, values, strategy and culture Pages 75 to 77
C Performance measures, risk and controls framework Pages 75 to 77
D Stakeholder engagement Pages 75 to 77
E Wider workforce policies and practices Pages 75 to 77
2
Division of
responsibilities
F Leadership of the Board and Board operations Pages 78 to 80
G Board composition, roles and independence Pages 78 to 80
H Directors’ responsibilities and time commitment Pages 78 to 80
I Board support, information and advice Pages 78 to 80
3
Composition,
succession and
evaluation
J Board appointments, succession planning and diversity consideration
including senior management
Pages 80 to 82
K Board skills, knowledge and experience Pages 80 to 82
L Annual Board effectiveness review Pages 80 to 82
4
Audit, risk and
internal control
M Independence and effectiveness of internal and external audit functions Page 83
N Fair, balanced and understandable assessment of company’s position
andprospects
Page 83
O Risk Management and Internal Control Framework Page 83
5
Remuneration
P Remuneration alignment to strategy, company purpose and values Page 83
Q Executive and senior management remuneration Page 83
R Authorisation of remuneration outcomes Page 83
1
Board leadership and
Companypurpose
The role of the Board
The Board is responsible for providing effective leadership to the
Group and promoting AJBell’s long-term sustainable success to
generate shareholder value within a strong governance framework.
Itdoes this by setting strategic priorities and overseeing their delivery
in a way that enables sustainable growth, while maintaining a
balanced approach to risk within a framework of effective controls.
The Board is also responsible for ensuring the maintenance of a
robust system of internal controls and risk management and for
reviewing the effectiveness of the systems in place. The Board has
overall authority for the management of the business, strategy and
development. Details of AJBell’s purpose, strategy and delivery of
long-term value can be found in the Strategic report.
Collectively, the Board is responsible to stakeholders for protecting
their interests and contributing to wider society. The Board reviews
strategy annually during a dedicated business planning process with a
view to promoting the long-term success of the Group, during which
the Board considers the impact of business decisions on stakeholders
such as our shareholders, people, customers and advisers, suppliers,
regulators and wider society as a whole.
The powers of the Board are set out in the Company’s articles of
association and there are certain powers and financial limits sitting
alongside those powers, which are reserved to the Board because
their exercise is considered to be of overriding importance and
significance to the Group. The matters reserved to the Board are set
out on the website at ajbell.co.uk. The day-to-day running of the
business is delegated to the Chief Executive Officer, who derives
authority from the Board and cascades the agreed standards to the
business. Although a wide range of the powers and authorities of the
Board are delegated to the Chief Executive Officer, the Board retains
ultimate responsibility and authority for their exercise. Each member
of the Board acts in a way which they consider to be in the best
long-term interests of the Group and in compliance with their duties
under the Companies Act 2006.
The Board oversees the setting of objectives for the members of the
ExCo which are aligned with the Group’s high-level strategy and
long-term vision and monitors progress with their delivery at Board
meetings during the course of the year.
Culture
The Group’s culture is shaped and driven by the purpose, guiding
principles and strategy of the business. The Board assesses and monitors
culture via the culture dashboard which enables the benchmarking and
recording of core characteristics of culture, such as the monitoring of
Consumer Duty, impact of hybrid working and changes to employer
advocacy scores. The culture dashboard and HR updates are presented
to the Board annually and bi-annually, respectively. Key themes during
the year focused on improvements to talent management, diversity and
inclusion, workforce engagement, the hybrid working policy, employer
brand and culture. This year the Group has utilised the Great Place to
Work Survey to provide our people with the opportunity to provide
feedback on their working experience, leadership and culture.
Whistleblowing
AJBell has arrangements in place to ensure that our people can raise
suspicions of wrongdoing observed in the course of their work and
that any disclosures are taken seriously. Our whistleblowing framework
ensures that our people can confidentially or anonymously raise
concerns. Any whistleblowing investigation is handled independently
and follows a strict process to prevent victimisation and allow
safeguards to protect whistleblowers from retaliation or being
otherwise disadvantaged. This promotes a strong culture with our
customers, people, and shareholders.
Until 31 March 2024, the Board had delegated responsibility for the
oversight of whistleblowing to the Risk & Compliance Committee.
Details of the related oversight arrangements are set out in the Risk &
Compliance Committee’s report on page 96. The Board has since
delegated responsibility for the oversight of whistleblowing to the Audit
Committee and the Chair of the Committee, Eamonn Flanagan, has
been appointed as Whistleblowing Champion. The Audit Committee
monitors the operation of the whistleblowing arrangements, with the
ability to escalate matters to the Board if considered necessary.
Stakeholder relations
Our business strategy document, which is reviewed by the Board
each year as part of the annual business planning process, identifies
our key stakeholders with whom the business endeavours to engage,
so that the Board is aware of their views and can take them into
account as part of its decision-making processes.
The Board recognises the importance and benefits of engaging
withshareholders and other stakeholders and has a strong history
ofdoing so. Our key stakeholders and the principal engagement
activities undertaken by, or on behalf of, the Board during the year,
are set out within the Strategic report on pages 24 and 25.
O
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r
c
u
s
t
o
m
e
r
s
a
n
d
t
h
e
i
r
a
d
v
i
s
e
r
s
O
u
r
p
e
o
p
l
e
s
t
a
k
e
h
o
l
d
e
r
s
O
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o
t
h
e
r
O
u
r
s
h
a
r
e
h
o
l
d
e
r
s
Our
stakeholder
groups
The Board has identified
four key stakeholder
groups
Engagement with the workforce
The Board has continued to engage with the workforce via the
Employee Voice Forum, which comprises representatives from across
the business. Topics discussed during the year included AI, how to
improve hybrid working practices and workforce retention. Additionally,
to gain insight into the operations and culture of the business, the Board
engaged with the workforce by attending knowledge sharing and
networking events, our annual managers’ day, lunchtime and breakfast
briefings with other members of our senior management team and
other workforce social events.
Strategic report Governance Financial statements Other information
74 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 75
Key Board activities
The table provides a non-exhaustive record of key considerations of the Board during the year and the stakeholders impacted.
Calendar of events in FY24
Corporate Governance report
Relations with shareholders
The Board is committed to proactive and constructive engagement
with the Company’s investors and is keen to ensure that the views
ofshareholders are understood. The Board welcomed shareholders
in person to the 2024 AGM, which provided the Board with an
opportunity to communicate directly with, and answer questions
from, AJBell’s shareholders. The Chair of the Remuneration
Committee, Margaret Hassall, also consulted with shareholders
onproposed changes to our Remuneration Policy.
In addition to announcing regular trading updates to the market, the
Company has a comprehensive investor relations programme which
is focused on ensuring that the market, including sell-side analysts,
investors and proxy voting advisers, understand the Company’s
investment case, strategy and performance.
The CEO and CFO, supported by the Investor Relations Director, met
with analysts and investors throughout the year, both in person and
virtually, and presentations and recorded videos were made available
via our website following the publication of the Company’s interim
and full year results. The Chair and other Non-Executive Directors
were also available to meet with shareholders as required.
Feedback is sought directly from analysts and investors after all
meetings. This feedback is shared with the Board on a regular basis
and is supplemented by updates from AJBell’s corporate brokers.
This provides the Board with insights into current market perceptions
of the business and wider platform market, share price performance,
recent trading activity and changes to the shareholder register.
An overview of our investor relations programme is detailed to the
right. As noted above, in addition to the formal investor relations
programme, the management team engages with analysts and
investors throughout the course of the year.
The Company’s website has a dedicated investor relations section
which includes details of AJBell’s investment case, along with the
Annual Report and Accounts, historical financial reports and
presentations, regulatory announcements, financial calendar,
analystconsensus and other important shareholder information.
Conflicts of interest
The Company Secretary maintains a Register of Director’s
Interestswhich records the external directorships and shareholdings
of each Board member which could give rise to a potential or actual
conflict of interest. Potential conflicts of interests are disclosed
onappointment and on an ongoing basis via notification to the
Company Secretary and conflicts of interest are a standing agenda
item at each Board and Committee meeting. Given the potential
conflicts of interest as a result of the Representative Director being
anominee of a major shareholder, the Relationship Agreement
between the Company and Andy Bell makes provision for the
management of any conflicts which may arise.
The Board has considered the current external appointments of all
Directors which may give rise to a conflict. In any matter where a
Director’s interest does present an actual conflict, the Director shall
recuse themselves from any such discussion, and will not vote or be
counted in the quorum, when that matter is considered. Any new
external appointment of a member of the Board requires prior
approval by the Board.
Except as stated in note 28 of the Financial Statements, no Director
has, or has had, any material interest in any contract or arrangement
with the Group during the year.
The Group maintains what the Board considers to be appropriate
insurance cover in respect of legal action against the Directors.
How the Board operates
During the year, the Board held seven scheduled meetings and
twodedicated business planning meetings. The Board also meets
when necessary to discuss important emerging issues that require
consideration between scheduled Board meetings. The Chair also
met with the other Non-Executive Directors without the presence
ofExecutive Directors.
Each Board member is expected to attend each of the Board
meetings, Board Committee meetings on which they serve, and the
AGM. If unable to attend, they provide feedback on the matters under
consideration via the chair of the relevant body in advance of the
meeting. The Company Secretary or their nominee attends all
meetings. Other members of the senior management team, external
advisers and industry experts are invited to attend Board meetings to
present and provide insight on the items being considered.
• FY23 year-end trading update announced
• FY23 annual results announced
• CEO and CFO annual results Q&A video
on website
• Investor roadshow (UK) and analyst
presentations, both in-person and virtually
• Annual Report published
Q1
• FY24 Q2 trading update announced
• FY24 interim results announced
• CEO and CFO interim results Q&A video
on website
• Investor roadshows (UK and US) and
analyst presentations, both in-person
andvirtually
Q3
• FY24 Q3 trading update announced
• Consultation with shareholders about
proposed changes to Directors’
Remuneration policy
Q4
• FY24 Q1 trading update announced
• Engagement with shareholders and proxy
advisers prior to AGM
• AGM with shareholders attending in
person and being able to ask questions
remotely in advance and directly during
the meeting
• Attendance at Berenberg UK Corporate
Conference
Q2
Strategy
Had oversight of the annual business planning process, discussed
and challenged the recommendations regarding the Group’s future
strategic growth. Approved the FY25 strategy and three-year plan.
CA
OP
Sh
C
WE
R
Su
Considered the opportunities and challenges faced by the Group in
the changing macroenvironment including appropriate financial,
strategic and technological responses.
CA
OP
Sh
C
WE
R
Su
Reviewed analysis of recent developments in the advised and D2C
platform markets and approved changes to product propositions
and the Product Governance Framework.
CA
Sh
R
People, culture and governance
Arranged and participated in the external evaluation of the
Board and its Committees, reviewed evaluation outcome reports
and suggestions.
CA
Sh
R
Reviewed Board composition and succession planning for the
Board and senior management.
CA
OP
Sh
R
Assessed the cognitive diversity of the Board and Executive
Committee using the Diversity of Thought (DOT) Scorecard® with
participants completing a DOT questionnaire.
CA
OP
Sh
R
Reviewed and approved the Group’s Corporate Governance Policy.
CA
OP
Sh
R
Reviewed and approved the Anti-Bribery and Corruption Policy,
Modern Slavery Statement and Diversity Policy.
CA
OP
Sh
R
Su
Received and reviewed updates on ESG matters.
CA
OP
Sh
C
WE
Appointed two new Non-Executive Directors to the Board.
CA
OP
Sh
R
Engaged with our people via our Employee Voice Forum and
employee survey and received updates from management on key
topics. Conducted ‘Lunch and Learn’ sessions and a Manager’s Day
where the workforce were able to converse with the Board.
OP
Conducted an annual review and refinement of our culture dashboard.
OP
Finance and performance
Approved the final and interim dividend payments in accordance
with the Group’s dividend policy.
Sh
R
Reviewed and approved the Group’s interim and full-year financial
results and Annual Report and Accounts prior to publication, with
consideration given to business viability and the preparation of the
accounts on a going concern basis.
CA
OP
Sh
R
Approved revisions to the Group’s capital allocation framework.
CA
OP
Sh
R
Su
Reviewed and approved revisions to the Group’s Financial
ControlsPolicy.
CA
OP
Sh
R
Su
Had oversight of financial performance against the budget and
market expectations.
CA
Sh
R
Risk management and regulatory matters
Approved the Group’s risk framework and appetite and reviewed
and approved the Group Risk Management Policy.
CA
OP
Sh
R
Considered stress testing activity, the potential impact of the
Group’s risks and challenged and approved the Group’s ICARA.
CA
Sh
WE
R
Attended training provided by external firms on CASS and the Senior
Managers and Certification Regime.
CA
Sh
R
Reviewed and challenged CASS reports.
CA
Sh
R
Reviewed and challenged the Group’s activity to ensure effective
implementation of the FCA’s Consumer Duty, including receiving
regular updates on customer complaints, themes and mitigation.
CA
Sh
R
Approved the Group’s annual Consumer Duty Statement as
required by the FCA.
CA
Sh
R
CA
Customers & Advisers
OP
Our People
Sh
Shareholders
C
Communities
WE
Wider environment
R
Regulators
Su
Suppliers
Key
Strategic report Governance Financial statements Other information
76 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 77
Executive committee
gender
Men
67%
Women 33%
2
Division of responsibilities
Leadership structure
The chart provides an overview of the Board composition and Committee structures.
Roles and responsibilities within the Board
Board-delegated responsibilities to the Board Committees
Delegated authority from the CEO to the Executive Committee (ExCo)
Corporate Governance report
Board
Responsible for leading the Group and promoting AJBell’s long-term sustainable success by setting strategy to generate stakeholder value.
Accountable for monitoring the effectiveness of a robust system of governance, internal controls and risk management.
Non-Executives Executives
Chair
Leads the Board to ensure
overall effectiveness and
shapes boardroom culture
by promoting open and
effective discussion at
meetings to enable
valuable contribution from
all participants. Meets
regularly with the SID,
Non-Executive Directors
and CEO outside of formal
meetings during the year.
SID
Provides a sounding board
for the Chair and is
available as an intermediary
for the Non-Executive
Directors. The SID is
available for shareholder
communication where
normal lines of
communication are not
successful or where it is
considered more
appropriate. The SID also
leads the annual appraisal
of the Chair by the
Non-Executive Directors.
Non-Executive
Directors
Constructively challenge
the performance of the
ExCo in relation to the
delivery of strategy and
personal objectives. Whilst
the Representative Director
is not independent under
the Code and is a nominee
appointed to represent and
safeguard the interests of a
major shareholder, he is
subject to the same duties
and responsibilities as the
other Non-Executive
Directors, including the
exercise of independent
judgement and to promote
the success of the
Company for the benefit of
its shareholders as a whole.
Company Secretary
Ensures that the Board and Committee procedures are complied with and advises on corporate governance and related regulatory compliance. Ensures the timely
delivery of information and meeting papers and prepares minutes of the meeting to clearly record discussions and decisions.
Executive Committee
Responsible for the day-to-day management of the Group’s operations under delegated authority from the CEO. The members and role of the ExCo
canbefoundonpage 79.
CEO
Under delegated authority
from the Board, the CEO is
responsible for the
leadership and
management of the
business to achieve its
strategic objectives and
ensure compliance with
regulatory and legal
obligations. Responsible for
communicating senior
management’s views on
business issues to the
Non-Executive Directors.
Executive Directors
The other executive Board
members (the CFO and
COO) add commercial and
internal perspectives to
discussions at Board
meetings and support the
CEO in communicating
senior management’s views
on business issues to the
Non-Executive Directors.
Hold specific management
responsibilities in the
day-to-day running of the
business.
Audit Committee
Oversees financial and
narrative statements,
systems of internal
controls, internal and
external auditors and the
related processes.
See report p88
Proposition
Committee
Oversees the
managementand
distribution of Advised and
D2C products.
Operational
Committee
Oversees operations and
people, including service
quality, resilience,
efficiency, workforce
engagement, talent
management, employer
brand and culture.
Finance & Treasury
Committee
Oversees financial and
liquidity management,
forecasting, market
disclosures, financial
controls and cash funds
held on behalf of
customers.
Executive Risk
Committee
Oversees all assurance
functions, including
regulatory compliance and
risk management
(excluding external and
internal audit).
Investment
Committee
Oversees the
managementand
distribution of investment
products.
Risk & Compliance
Committee
Oversees risk appetite, risk
management framework,
and compliance with laws,
regulations and ethical
codes of practice and the
prevention of fraud.
See report p94
Nomination
Committee
Oversees the procedure
and process for Board and
senior appointments,
succession planning and
reviews Board composition.
See report p84
Remuneration
Committee
Ensures that the
remuneration policy and
practices support strategy,
promote long-term
sustainable success, and
rewards fairly and
responsibly, within
regulatory requirements.
See report p98
Disclosure
Committee
Oversees compliance with
the Listing Rules, Disclosure
Guidance and Transparency
Rules, UK Market Abuse
Regulation and procedures
regarding the disclosure of
highly confidential and
inside information.
Board Committees
Details of the roles and responsibilities of the Board Committees,
other than the Disclosure Committee, can be found in the respective
Committee’s report. The terms of reference of each Committee are
available on the Group’s website at ajbell.co.uk.
The Board has also established a Non-Executive Director ESG Forum
to undertake periodic deep dives on ESG issues, provide insights and
make recommendations to the Board on ESG strategy and ESG-
related risks and opportunities.
Time commitments
Members of the Board are expected to devote such time to the affairs
ofthe Group as is necessary to enable them to perform their duties as
Directors. The time that Non-Executive Directors are expected to
commit to their role varies according to their responsibilities. The time
commitments of the Directors are reviewed annually, or more regularly
by the Nomination Committee if required. Non-Executive Directors are
expected to commit a minimum of 30 days per year for core Board
activities and membership of Board committees. Committee Chairs are
expected to commit a minimum of 40–45 days per year. The Senior
Independent Director is expected to commit a minimum of 35 days per
year, whilst the Chair is expected to commit a minimum of 90 days per
year. It is acknowledged that Directors are likely to devote substantially
more time to their role than the required minimum.
The Board is satisfied that the Chair and each of the Non-Executive
Directors devote sufficient time to their duties.
During the year, the Nomination Committee, on behalf of the Board,
approved the following significant additional external appointments
taken by the Non-Executive Directors as those appointments were
not considered to impair their ability to serve as Directors of the
Company in view of their time commitments:
• Eamonn Flanagan as Chair of Movestic Liv, Chesnara’s life
assurance subsidiary in Sweden;
• Evelyn Bourke as Chair of GenesisCare UK and Non-Executive
Director of GenesisCare Cayman Holdings Limited; and
• Fiona Fry as a Non-Executive Director of Revolut NewCo UK Ltd.
Director independence and tenure
The Nomination Committee completed its annual review of
theindependence of each Non-Executive Director considering
lengthoftenure, relationships and other circumstances which are
likelyto impair, or appear to impair, the Director’s independent
judgement. It was concluded that each of the Non-Executive Directors,
excluding the Representative Director, remained independent. On the
recommendation of the Nomination Committee, each of the Non-
Executive Directors have been assessed by the Board to be independent
as to character and judgement and to be free of relationships and
othercircumstances which could materially affect the exercise of
theirjudgement.
Michael Summersgill
Chief Executive Officer
Peter Birch
Chief Financial Officer
Mo Tagari
Chief Technology Officer
Roger Stott
Chief Operating Officer
Kina Sinclair
Group Legal Director and
Company Secretary
Billy Mackay
Managing Director, Advised
Karen Goodman
Chief Risk Officer
Liz Carrington
HR Director
Charlie Musson
Managing Director, D2C
Executive committee
ethnicity
White
67%
Ethnic minority 33%
Executive Committee
There is a clear division of responsibilities
between the Chair and the CEO which is
recorded in each of their respective terms
of reference which have been approved
by the Board.
The day-to-day management of the
Groupis delegated by the Board to the
CEO, who is supported by the Executive
Committee, which he chairs. The
day-to-day management of operations is
delegated to the Executive Committee.
The CEO and the Executive Committee
exercise their respective delegated
responsibilities within the confines of the
risk and control framework set by the
Board. We consider that this simplified
management structure effectively enables
the Board to ensure that its governance
responsibilities are properly discharged.
The membership of the Executive
Committee comprises the CEO, CFO
andCOO (whose biographies can be
foundon pages 72 and 73) and the leaders
of thebusiness functions. The members of
the Executive Committee as at 30
September 2024 are pictured to the right,
and their biographies can be found on the
website at ajbell.co.uk.
New appointment
Following the year end, Ryan Hughes was
appointed to the Executive Committee as
Managing Director of AJBell Investments,
a role he had held on an interim basis since
late 2023. Kina Sinclair was also appointed
Company Secretary, effective from
1November 2024.
Strategic report Governance Financial statements Other information
78 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 79
Corporate Governance report
3
Composition, succession
and evaluation
Board composition
The Board has delegated responsibility to the Nomination Committee
for reviewing Board composition, succession planning for the Board
and senior management, selecting and appointing new Directors and
considering the results of the Board effectiveness review. During the
year, the Board appointed two new independent Non-Executive
Directors using an external search consultancy and re-assigned
theroles of Consumer Duty Champion to Margaret Hassall and
Whistleblowing Champion to Eamonn Flanagan.
More information on the work of the Nomination Committee during the
year can be found on pages 84 to 87.
The Board composition data can be found on pages 72 and 73 and
details of Board diversity including disclosure requirements under the
Listing Rules are set out in the Nomination Committee Report on
pages 84 to 87.
All directors are subject to conduct rules laid down by the FCA and
must satisfy requirements relating to their fitness and propriety. In
addition, the Chair, the Senior Independent Director and Chairs of the
key board committees are subject to all aspects of the FCA’s Senior
Managers and Certification Regime.
Each of the Directors is subject to annual re-election and intends
tosubmit themselves for re-election at the 2025 AGM. All directors
eligible for re-election (save for Roger Stott who will be retiring from
the Board in December 2024) will be recommended to shareholders
for re-election at the AGM.
The terms and conditions of appointment of the Chair and each
ofthe Non-Executive Directors are available for inspection during
normal business hours at the Company’s registered office and at the
AGM for 15 minutes before and during the meeting.
Board induction, training and development
On appointment, all Directors undertake a comprehensive formal
induction programme which includes meeting with the Chair,
Executive Committee, and other members of the senior management
team. Areas covered include an overview of the Company’s business
strategy and operating model, products and markets, capital
management and financial controls, and risk and governance
responsibilities. The meetings are supplemented with the provision
ofbackground reading and visits to parts of the business to meet
withcolleagues for further understanding of the organisation. Each
induction is tailored to the individual skills and experience of the
Director and is supplemented by a session provided by external
advisers where relevant.
To enable all Directors to fulfil their duties effectively and remain
informed of changes to legislation, regulation and market practice,
training sessions are delivered by internal or external advisers and
industry experts where appropriate. During the year, the Board
received external presentations on the Client Assets Sourcebook,
Senior Managers and Certification Regime, and cyber security and
ransomware. Non-Executive Directors are also encouraged to attend
external seminars on topics which they consider appropriate for their
professional development needs.
As part of the annual appraisal process, Executive Directors
undertakeperformance reviews and the Chair reviews and agrees
thetraining and personal development requirements of the Non-
Executive Directors.
Succession planning
The Board has the overall responsibility to ensure there is
adequatesuccession planning for the Board and senior management.
It continues to review plans for the orderly succession of appointments
to the Board and senior management so that the right balance of
appropriate skills and experience is represented. The Nomination
Committee is responsible for keeping the leadership of the Company
under review including formulating succession plans for the Board and
senior management and making recommendations to the Board.
Further details can be found in the Nomination Committee report on
pages 86 and 87.
Board performance review
The Board conducts an annual review of its performance which is
akey mechanism for ensuring that it continues to operate effectively
and for setting objectives and development areas for the forthcoming
year. This annual review is conducted through a formal evaluation
and considers the work of individual Directors, the Board and
BoardCommittees.
2023 Board Performance Review
An internally-led review of the Board and its Committees was undertaken in 2023. The process and outcomes of this review were set out
fully in last year’s Annual Report. The Chair evaluated the performance of the Non-Executive Directors, and the Non-Executive Directors
led by the Senior Independent Director evaluated the performance of the Chair during the year. The findings of the review of the Board
and each of its Committees indicated that the Board was operating effectively overall, however recommendations were identified.
Progress against these recommendations is reported in the following table:
Areas of focus and recommendations Progress
The need to increase the level of focus on the
long-term composition of the Board along with
talent management and succession planning
below Board level.
Reviewed Board composition to ensure an appropriate balance of independent Non-
Executive Directors and other Directors as required by the Code and to ensure external
diversity targets are met.
Board composition and succession planning has been a main focus of the Nomination
Committee and Board over the course of the year with the appointments of two Non-
Executive Directors, including successor to the Chair of the Risk & Compliance Committee.
Non-Executive Director, Executive Committee and senior management succession planning
will continue to be a main focus for the Nomination Committee. In addition, further
opportunities are being created for the Board to engage with senior management to provide
the Board with visibility of emerging talent in the Company.
Continuous improvements were required to
management reports and papers to ensure high
quality and relevant information flowed to the Board.
A new approach to the production of high quality Board papers and management
information, including KPIs is being explored to continue to enhance the quality of debate at
Board meetings and assist the Board in making timely and informed decisions.
Opportunities should also be sought for more
Board engagement outside of the boardroom to
continually build on the positive relationships on
the Board.
To build on the positive relationship between members of the Board, additional board dinners
have been scheduled into the Board calendar, and NED only sessions take place before each
Board meeting.
Julie Chakraverty joined the
boardinJune2024and shares
her insights
What are your first impressions of AJBell?
Joining the Board and getting to know my new colleagues across
the company, I’ve really been made to feel at home. AJBell has a
strong and distinctive brand our customers love. I’ve seen this first
hand through meeting customers face to face. The Board has an
open culture which welcomes new ideas. Our Chair in particular
has helped me quickly get up to speed and will always make the
time to continue a discussion over a cup of coffee.
What do you bring to AJBell, its Board and
itsmembers?
I was hired to bring some unique skills and experiences that
wouldcomplement the backgrounds of our existing board
members. In particular I have recent entrepreneurial and product
experience as a tech founder, on top of an extensive financial
services career. I want to help the management team make the
AJBell platform and experience even better so we reach more
customers and help them to realise their goals.
How important was the induction for you?
I found my interview process to be a series of very open
conversations, and induction was then a natural extension.
Ilovespending time out in the business, to listen and learn.
Theprogramme really hit the right notes for me, getting to meet
the teams across our Advised and D2C platforms. I’ve met our
Employee Forum to learn how colleagues are embracing AI in
their daily work, sat with our customer support teams, spent time
with our product leads, and joined key customer meetings. It’s
been a hugely informative and enjoyable process.
Les Platts was appointed as Representative Director of Andy Bell in
July 2023 after the Company entered into a Relationship Agreement.
Under the Relationship Agreement, Andy, the former Chief Executive
Officer and a co-founder of the Company, who, together with his
connected persons, is the largest individual shareholder, has the right
to nominate one Director for appointment to the Board. Les is not
considered independent pursuant to the Code.
The Code requires the Chair to be independent on appointment.
Thereafter, the test of independence no longer applies to this role.
FionaClutterbuck’s independence was scrutinised during the
Chairselection process and she was deemed to be independent
onappointment.
Following the appointment of Fiona Fry and Julie Chakraverty
asNon-Executive Directors, as at 30 September 2024, the Board
comprised the Chair, five independent Non-Executive Directors,
onenon-independent Non-Executive Director and three Executive
Directors. As a result, at least half of the Board, excluding the Chair,
are considered independent Non-Executive Directors.
The Board believes that its composition remains appropriate and that
no single individual or group dominates the decision-making process.
Board support, information and advice
The Directors have access to independent professional advice at
theGroup’s expense, as well as to the advice and services of the
Company Secretary, who is available to advise the Board on corporate
governance matters. The Company Secretary ensures appropriate and
timely information flows between the Board, its Committees and senior
management, enabling the Board to exercise its judgement and make
fully informed decisions when discharging its duties. The Company
Secretary supports the Chair in setting the Board agenda. Board papers
are distributed to all Directors in advance of Board meetings via a secure
electronic system allowing Directors to access information in a
timelymanner.
Strategic report Governance Financial statements Other information
80 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 81
Stage 5: May – Jul 24
Recommendations and action plan
To assist the Board in building on the significant positive impact it already
provides, the review offered some recommendations. The Board
adopted the recommendations and developed a plan to implement the
actions with oversight by the Nomination Committee. The key
recommendations from the review are as follows:
• review the Board agenda to rebalance the time spent on strategic
matters versus operational oversight;
• continue to devote greater focus to longer-term strategic issues and
deliver a clear ambition on strategic objectives;
• review Board Committee membership in light of the appointment
ofnew Non-Executive Directors;
• enhance the quality of Board papers and management information;
and
• review the Board and Committee calendar to optimise time spent in
Manchester.
Corporate Governance report
2024 Board Performance Review
The Code and the Financial Reporting Council’s Guidance On Board Effectiveness recommend that the annual performance review
ofthe Board should be externally facilitated every three years. To this end for FY24 the Board engaged Alison Gill of Bvalco Limited
(Bvalco) to assist with the evaluation of its own performance, that of its Committees and individual Directors. Bvalco has no other
connection with the Company or individual Directors.
The external evaluation provided the Board with the opportunity to assess the effectiveness of the collective Board, as well as each
BoardCommittee and individual Director. The process allowed the Board to receive input from key stakeholders with direct involvement
and reporting to the Board, including members of the Executive Committee. The review process and outcomes are reported below,
highlighting further areas of focus and development that were identified during the process, as well as identifying the strengths that
could continue to be optimised.
The progress made on the actions taken to implement the recommendations from the 2024 performance review will be reported in the
2025 Annual Report and Accounts.
Stage 4: May 24
Feedback and report findings
Following an analysis of the preliminary findings and the identification
ofkey themes for feedback to the Board, a draft report and agreed
priorities were provided to the Chair of the Board and the final report
waspresented to the Board. Feedback on the effectiveness of each of the
Board Committees was provided to the chair of the relevant Committee.
At each of the Committees’ subsequent meetings, discussions on specific
areas of the report were led by the respective Committee chair. The Chair
of the Board received a report with feedback on individual Directors and
feedback on the Chair’s performance was provided to the Senior
Independent Director.
Overall, the findings endorsed the belief that the Board and its
Committees are performing and operating effectively, and that the
Directors are satisfied with the performance and effectiveness of the
Board and its Committees. The Board was found to be engaged and
properly committed to doing the right thing for the Company. There is a
high degree of respect for the skills, capability, and contribution that each
person delivers to the Board and, there was substantive evidence that the
Board is delivering positive impact for the Company.
Stage 3: Mar – Apr 24
Interviews and Board and
Committee meeting
observation
In consultation with the Chair, Bvalco agreed the
items to be prioritised and addressed during the
review process. The review took the form of
detailed interviews with every Board member,
members of the Executive Committee, the Head
of Internal Audit and the Company Secretary.
Bvalco also observed various Board and
BoardCommittee meetings and reviewed
meeting papers, strategy documents, terms of
reference of the Committees and Board policies,
as required.
Stage 2: Feb – Mar 24
Agreement of form and scope
of the Board evaluation
The scope and objectives of the review were
agreed with Bvalco. The scope covered general
areas of effectiveness including: the strengths
and capabilities of the Board and each of its
Committees, Board composition, dynamics and
succession as well as individual Directors. The
objectives of the review process were:
• to facilitate the development of an agreed
set of priorities to improve the functioning
of the Board and Board Committees;
• to conduct a review of the Chair to support
the SID with the annual review of the Chair;
• to provide the Board with clarity about the
strengths and weaknesses of the Board; and
• to provide a clear set of priorities for
improving the effectiveness of how the
Board and Board Committees work, given
the needs of the Company.
Stage 1: Oct 23
Appointment of external
facilitator
Following a Request for Proposal from four
independent external Board performance
review professionals, the written proposals from
the prospective facilitators were shared with the
Chair of the Board. On reviewing the proposals,
a shortlist of two facilitators met with the Chair,
the Chief Financial Officer and the Company
Secretary to discuss their evaluation
methodologies and to review the options
available to the Company. The written proposals
for each of the prospective facilitators were
discussed by the full Board and in October
2023, the Board approved the appointment of
Bvalco Limited as the external facilitator.
In selecting the external Board evaluator,
theskills and competencies of the facilitator
were assessed in line with the
recommendations of the FRC Guidance
onBoard Effectiveness, amongst other things.
Existing commercial relationships and conflicts
of interest were considered to ensure that an
evaluator wasselected who was able to
exerciseindependentjudgement.
4
Audit, risk and internal control
Within the Statement of Directors’ responsibilities set out on page
123, the Directors have declared that they consider the Annual Report
and Financial Statements as a whole to be a fair, balanced and
understandable assessment of the Group’s position and
performance, business model and strategy.
Details of the composition and work of the Audit Committee,
including its role in relation to the 2024 Annual Report and Financial
Statements can be found on pages 88 to 93. The description of the
business model and strategy for delivering the objectives of the
Group are on pages 20 and 21.
The Board monitors the Group’s risk management and internal
control systems on an ongoing basis and carries out a review of their
effectiveness. Whilst the Board retains overall responsibility, it has
delegated oversight of the risk management and internal control
systems to the Audit Committee and Risk & Compliance Committee.
Further information on the roles of the Audit Committee and Risk &
Compliance Committee in relation to risk management and internal
control systems can be found in the Committee reports on pages 88
to 93 and 94 to 97, respectively.
A robust assessment of the principal risks faced by the Group,
including those that would threaten its business model, performance,
solvency and liquidity has been carried out. The Group’s ongoing
process for identifying, assessing and managing the principal risks
faced by the Group and the risks and mitigating factors are detailed
inthe risk management section on pages 58 to 60. Details of the
Directors’ assessment of the viability of the group can be found
onpage 67.
5
Remuneration
The Remuneration Committee assists the Board in fulfilling its
responsibility to shareholders to ensure that remuneration policy
andpractices support strategy and long-term sustainable success
whilst rewarding fairly and ensuring that incentives and rewards
alignwith culture.
The Remuneration Committee has delegated responsibility for
determining the policy for executive remuneration and setting
remuneration for the Chair of the Board, CEO, other Executive
Directors, members of the senior management team, individuals
whoare classed as being material risk takers and certain Risk and
Compliance members of the workforce. During the year no individual
Director was involved in deciding their own remuneration. For details
on the work of the Remuneration Committee and the Directors’
Remuneration report, see pages 98 to 119.
Annual General Meeting
The AGM will be held on 29 January 2025 at 12 noon at AJBell,
4Exchange Quay, Salford Quays, Manchester, M5 3EE. Shareholders
will be invited to attend in person or by proxy. Further details about
how shareholders can attend the AGM, ask questions and vote by
proxy are set out in the notice of the 2025 AGM.
To further engage with our shareholders, a video covering the key
points from our 2024 annual results will be published on our website
at ajbell.co.uk/group/investor-relations on 5 December 2024. The
video outlines our business performance and financial results for the
year ended 30 September 2024, as well as the outlook for 2025 and
will be presented by CEO, Michael Summersgill, and CFO, Peter Birch.
Fiona Clutterbuck
Chair
4 December 2024
Strategic report Governance Financial statements Other information
82 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 83
Nomination Committee report
The Board recruitment process:
• The recruitment process for directors is designed to ensure that
the Board possesses a diverse range of skills and appropriate
objectivity. It also involves detailed referencing and other checks
to establish the candidate’s credentials, including suitability, fitness
and propriety. Regulatory approval is required for certain
Boardroles.
• The Nomination Committee agreed a candidate specification
based on objective criteria, setting out the knowledge, skills,
experience, and attributes required. Ethnic and gender diversity
were also key considerations taking into account the composition
of the Board whilst ensuring that any appointment was made
onmerit.
• From the candidate specification, Warren Partners conducted an
extensive search covering a wide talent pool from which
candidates were assessed for a longlist consideration and initial
meetings with the Chair.
• Warren Partners produced a longlist of potential candidates who
were interviewed by Committee members and some other
members of the Board. Following this, a shortlist of candidates
was compiled. After consideration by the Committee, three
candidates emerged for further interviews by the Committee.
• Feedback on the candidates was obtained through professional
references and these, together with the feedback from the
Committee members, were considered alongside the relative
characters, skills and experience of the candidates. Following due
and careful consideration of each of the candidates and the
current needs of the Board, based on a unanimous decision, the
Committee selected Julie Chakraverty as the sole preferred
candidate for the role.
• Ahead of recommending Julie to the Board as the preferred
candidate, the Committee assessed her independent status and
reviewed potential conflicts of interest and other time
commitments.
Julie joined the Board as a Non-Executive Director with effect from
1June 2024. She brings more than 30 years of financial services and
technology leadership experience to the Board having spent most of
her early career at UBS where she held multiple global leadership
roles. Julie was also the founder and CEO of Rungway Limited, an
employee engagement platform that empowers people to seek and
share advice at work. Julie previously served on the Boards of
Santander UK plc, Aberdeen Asset Management and Standard Life
Aberdeen plc (now Abrdn plc), Amlin plc (now Mitsui Amlin), and the
Spirit Pub Company plc (now Greene King). She is currently a
Non-Executive Director and Chair of the Ethics and Sustainability
Committee at Starling Bank and the Senior Independent Director
andChair of the Cyber Security Committee at NCC Group plc.
Dear shareholder
As Chair of the Nomination Committee, I am pleased to present the
Committee’s report for the year ended 30 September 2024.
The Committee continues to play an important role in ensuring that
the Company is led by a Board and senior management with the
combination of skills and experience required to deliver sustainable
success for the benefit of all our stakeholders. It has been a particularly
busy year for the Committee, with the focus primarily having been on
Board and senior management recruitment and succession planning,
the composition of the Board’s Committees and overseeing the
external Board effectiveness review.
Further information about the activities of the Nomination
Committee is set out in this report.
Membership
Appointments to the Committee are made by the Board on
therecommendation of the Committee. They are for a period of
upto three years, which may be extended for two further periods
ofthree years provided the majority of the Committee members
remain independent.
At year end, the Committee comprised four independent
Directors;myself, Non-Executive Chair and Chair of the Committee,
Evelyn Bourke, the Senior Independent Director, Eamonn Flanagan
andMargaret Hassall, both of whom are independent Non-
ExecutiveDirectors.
The Company Secretary acts as Secretary to the Committee.
TheCEO, other members of the senior management team and
external advisers are invited to attend the Committee’s meetings
bythe Chair, as and when considered appropriate.
Board composition
Last year, we reported that, following a review of the composition of
the Board and its Committees in mid-2023 and with the appointment
of Les Platts to the Board as a non-independent Non-Executive
Director, the Committee identified a need for additional independent
Non-Executive Directors to ensure continuous compliance with
corporate governance rules and best practice.
Following the appointment of Fiona Fry as an independent Non-
Executive Director with effect from 7 December 2023, we reported that
we had commenced a search for a further independent Non-Executive
Director. The process was led by myself as Chair, with the support of the
Committee members. The Committee engaged Warren Partners, an
independent recruitment consultancy firm, to assist with the search and
the recruitment process commenced in January 2024. Warren Partners
is an independent party with no other connection with the Company or
any individual Director other than to assist with searches for executive
and non-executive talent.
Her wealth of experience and knowledge in the financial services
sector will be invaluable as the Board continues to focus on strategic
priorities. The appointment further strengthens the diversity and skill
set of our Board as we also make progress against targets and
growthplans.
Following the changes, at year end the Board comprised the Chair,
five independent Non-Executive Directors, one non-independent
Non-Executive Director and three Executive Directors, so there was
at least half of the Board, excluding the Chair, who were considered
independent Directors. This meant that the Board had achieved all
FCA requirements of 50% female representation, one member of the
Board to be from a minority ethnic background and still satisfied the
requirement for at least one of the Chair, CEO, CFO or Senior
Independent Director to be a woman.
Composition of the Board Committees
As reported last year following the appointment of Fiona Fry, it
wasthe intention that she assume the role of Chair of the Risk &
Compliance Committee, subject to regulatory approval, to succeed
Simon Turner, who completed nine years’ service and retired from the
Board on 31 March 2024. Regulatory approval was obtained on 28
March 2024 and Fiona Fry assumed the role of Chair of the Risk &
Compliance Committee on 31 March 2024.
Following the recent changes to the Board during the year, the
Committee reviewed the existing membership of all of the Board
Committees. The review took into account governance rules and
best practice on Committee composition as well as Committee Chair
succession considerations.
The outcome of the review was that the Committee recommended
anumber of changes to the Board, which the Board approved with
effect from 11 July 2024. The Committee considered that the
changes would further strengthen the existing corporate governance
framework by providing a further level of independent non-executive
challenge. Following the Board‘s approval of the changes, I stepped
down as a member of the Remuneration Committee and Evelyn
Bourke stepped down from the Risk & Compliance Committee.
Margaret Hassall stepped down from the Audit Committee and joined
the Risk & Compliance Committee. Fiona Fry joined the Audit
Committee and Julie Chakraverty joined the Audit, Risk &
Compliance and Remuneration Committees.
Committee attendance
The Committee meets at least twice a year and may meet at
othertimes as agreed by the Chair or at the request of another
member of the Committee. During the year, the Committee had
two scheduled meetings and four additional ad hoc meetings.
Member Position
Meetings
attended / Eligible
meetings
1
Fiona Clutterbuck Chair 6/6
Evelyn Bourke Senior Independent Director 6/6
Eamonn Flanagan Non-Executive Director 5/6
2
Margaret Hassall Non-Executive Director 6/6
1. Including ad hoc meetings.
2. Eamonn Flanagan was unable to attend an ad hoc meeting arranged
atshortnotice.
For ad hoc meetings members were unable to attend, members
provided input ahead of those meetings via the Committee Chair.
Role and responsibilities
The Nomination Committee is responsible for reviewing
theleadership needs of the business to ensure it can continue
tosucceed. This includes succession planning, making
recommendations to the Board in respect of appointments
totheBoard, the Board’s Committees, the ExCo and the
chairmanship of the Board’s Committees. The Committee is
responsible for keeping the structure, size and composition
oftheBoard and those other governance bodies under regular
review, and for making recommendations to the Board about any
changes that are necessary, considering the skills and expertise
required to deliver the Group’s strategy. The Committee is also
responsible for overseeing the development of a diverse pipeline
for succession.
The Committee considers the balance of skills, knowledge, and
experience on the Board and ExCo and the diversity needed when
determining the capabilities required for any new role. Succession
plans for Executive and Non-Executive Directors and senior
management, in particular for the key roles of Chair of the
Boardand CEO, are considered by the Committee.
The role and responsibilities of the Committee are set out in its
formal terms of reference, a copy of which can be viewed on the
Group’s website ajbell.co.uk.
Fiona Clutterbuck
Chair of the Nomination
Committee
Main activities during the financial year
The Committee met six times during the year and a summary of the work undertaken is presented below.
Activity Nov Apr
1
May Jul Sept
Board appointment
Executive appointment
Board and ExCo succession planning
Board and Committee effectiveness review
Committee structures
Committee and Board governance (including D&I)
1. Two meetings were held in April.
Strategic report Governance Financial statements Other information
84 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 85
Executive Committee changes
At a senior management level, the Committee recommended to the
Board the appointment of Charlie Musson, Acting Managing Director
D2C, as the Managing Director, D2C, in the place of Kevin Doran, who
stepped down from the role in early 2024. In addition, the Committee
recommended to the Board the appointment of Ryan Hughes as
Managing Director, AJBell Investments subject to regulatory approval.
Succession planning
The Committee is charged with keeping the leadership of the
Company under review including formulating succession plans for
the Board and ExCo and making recommendations to the Board.
Toensure the Company’s leadership has the talent needed for the
future, the Committee received updates on executive succession
management and reviewed both short-term contingency and
long-term succession planning for the members of the ExCo during
the year. This provided the Committee with a view of the talent
pipeline of potential leaders in the business and to understand where
the gaps were and the actions to be taken to address capability
requirements.
At Board level, the Committee reviewed, and recommended to
theBoard for approval, the Non-Executive Director succession plan.
The succession plan caters for contingency / emergency planning
(forsudden and unforeseen absence / departures of directors)
andlong-term planning for the orderly replacement of current
boardmembers.
Board diversity statement
The Board believes it is important that both the Board and ExCo
arediverse in multiple dimensions. The Committee leads the Board’s
diversity and inclusion agenda and sets measurable objectives for the
Board and ExCo with the aim of continuously improving diversity of
thought and in turn, the quality of debate and decision making.
It is the Board’s policy for all appointments to be made on merit, in the
context of the skills, experience and knowledge which the business
At senior management level, a need to improve diversity will remain
akey area of focus, in particular, in relation to natural succession
changes, as and when they occur.
During the year, the Committee reviewed and updated our existing
diversity policy in order to ensure that it still remained relevant to the
changing needs of the business. The objective of the policy is to set
out our commitment at Board level to improving diversity.
Information on the gender balance of those in senior management and
their direct reports is set out in the Strategic report on page 36.
Re-election of Directors, independence, and
time commitment
The Committee performed its annual review of the independence
ofall Non-Executive Directors, with reference to their independence
of character and judgement and whether any circumstances or
relationships exist which could affect their judgement. The
Committee considered the circumstances set out in the UK Code,
which are likely to impair or could appear to impair the independence
of each Non-Executive Director.
The Committee concluded that it considered each of the Non-
Executive Directors (other than the Representative Director, Les
Platts) to be independent under the UK Code. As an appointee
ofashareholder, the Representative Director is not considered
independent but contributes by providing a link to Andy Bell’s
experience as well as his own in-depth knowledge of AJBell and the
financial services sector. The Representative Director is not a member
of any Board Committee. At least half the Board, excluding the Chair
(who was independent on appointment) are independent Non-
Executive Directors, in compliance with the UK Code.
Prior to recommending the reappointment of the serving Directors
tothe Board, the Committee also considered the time commitment
required for Non-Executive Directors to fulfil their responsibilities and
compliance with any applicable FCA requirements in relation to their
total number of directorships, and whether each reappointment
would be in the best interests of the Company. Detailed consideration
was given to each Director’s contribution to the Board and, where
applicable, its Committees, together with the overall balance of
knowledge, skills, experience, and diversity.
requires to be effective. Selection processes take into account the
wider elements of diversity, with a view to ensuring the composition of
the Board and other governance bodies is appropriately balanced to
support the strategic direction of the Group.
For Board appointments, AJBell will only engage with executive
search firms who have signed up to the Voluntary Code of Conduct
around diversity. Search firms are required to put forward a diverse
range (across multiple criteria) of credible, qualified candidates for
both executive and non-executive roles. Specifically, where
appropriate search firms are required to consider candidates for
appointment as Non-Executive Directors from a broader pool, which
may include those with little or no prior FTSE board experience.
The Board is committed to the recommendations of the Parker
Review on having a minimum of one director from an ethnically
diverse background and the FTSE Women leaders target of a
minimum of 40% female representation on the Board. I am pleased
toreport that the Company has met both targets.
The information below is provided in compliance with reporting
requirements under the Listing Rules. The Company is required to
disclose in its Annual Report, certain diversity metrics relating to the
composition of its Board and executive management, as well as its
performance against three diversity targets that have been set by the
FCA. Information on gender or sex and ethnicity is collected from the
Board and executive management at the recruitment stage.
The information below is provided as at 30 September 2024 and
confirms that the Company has met all of the following targets on
board diversity: (1) at least 40% of its board of directors are women;
(2) at least one of its most senior positions on the Board is held by a
woman; and (3) at least one individual on the Board is from a minority
ethnic background. In the case of the first and second targets, these
have been exceeded, with women representing 50% of the
Company’s Board and both the roles of Chair and the Senior
Independent Director (SID) being held by women.
Following that review, the Committee was satisfied that the Board
continued to be effective and has therefore recommended the
re-election of all of the members of the Board at the 2025 AGM.
Board and Committee evaluations
We reported last year that we would conduct an externally-led
Boardevaluation in early 2024, which was in line with the usual
three-year cycle and to allow the recent changes to the Board to
embed. The Board evaluation was led by Alison Gill of Bvalco Limited.
Alison is a behavioural psychologist who designs and delivers external
board reviews, with particular emphasis on the human behaviour
anddynamics elements that contribute or undermine board
effectiveness. Neither Alison Gill nor Bvalco Limited has any
connection with AJBell or any of the members of the Board. More
information on the Board evaluation process and outcome can be
found on page 82.
Nomination Committee priorities for 2024/25
The main focus of the Committee for the year ahead will be
consideration of other action required to further support ongoing
business growth and increasing stakeholder expectations and
demands. This will be in addition to the regular cycle of matters that
the Committee considers each year and the continuing focus on
succession planning at senior management level and the
development of a diverse talent pipeline.
Fiona Clutterbuck
Chair of the Nomination Committee
4 December 2024
Nomination Committee report
Reporting on gender or sex as at 30 September 2024:
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 50% 2 6 67%
Women 5 50% 2 3 33%
Not specified / prefer not to say – – – – –
Reporting on ethnic background as at 30 September 2024:
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including minority-white groups) 9 90% 4 6 67%
Mixed Multiple Ethnic Groups – – – 1 11%
Asia / Asian British 1 10% – 1 11%
Black / African / Caribbean / Black British – – – 1 11%
Other ethnic groups, incl. Arab – – – – –
Not specified / prefer not to say – – – – –
Note: data on ‘prefer not to say’ not included as would have an impact on anonymity.
Performance against FCA diversity targets
Target Outcome Position as at 30 September 2024
At least 40% of members of the Board are women Exceeded 50% of members of the Board are women
At least one senior Board position (Chair, CEO, SID or CFO)
isheld by a woman
Exceeded The positions of Chair and SID are held by women
At least one director from a minority ethnic background Met One Board director is from a minority ethnic background
Strategic report Governance Financial statements Other information
86 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 87
Audit Committee report
Dear shareholder
As Chair of the Audit Committee, I am pleased to present the
Committee’s report for the year ended 30 September 2024. The
report provides insight into our work over the year, and details how
we have discharged the responsibilities delegated to us by the Board.
Over the year, the Committee focused on its key responsibilities
ofassisting the Board in monitoring the preparation of the Group’s
financial reporting statements, assessing the effectiveness of the
internal controls, and providing oversight and governance around the
integrity of the Group’s external and internal audit processes, including
assessing the independence and objectivity of the external auditors.
As described in the Committee’s report last year, a formal tender
process for the external auditor was undertaken and the Committee
recommended the appointment of PwC to the Board. Subject to
shareholder approval at the 2025 AGM, PwC will be appointed as the
Group’s external auditor for the year ending 30 September 2025.
The Committee has continued to have a close dialogue with BDO
throughout their final year as our external auditor and I would like to
thank Neil and his team for their work, endeavours and contribution
since appointment. The Committee will oversee the detailed transition
and I look forward to working with PwC in the coming year.
Finally, I would like to thank my fellow Committee members for their
input and insights during the year, especially Margaret Hassall, who
stepped down from the Committee in July 2024. I would also like to take
this opportunity to formally welcome Julie Chakraverty and Fiona Fry as
members from July 2024. Julie and Fiona bring with them a wealth of
experience which will enhance the Committee’s deliberations and
ensure we continue to foster a broad range of perspectives.
Further information on the activities of the Audit Committee is
provided on the following page.
Membership
Membership of the Committee is reviewed annually by the Chair
ofthe Committee as part of its annual performance evaluation.
Recommendations for new appointments are considered by the
Nomination Committee, prior to Board approval.
The Board is satisfied that the Chair of the Committee has recent
andrelevant financial experience, and the Committee as a whole
hascompetence relevant to the business sector in which the Group
operates. Biographical information on each member is set out on
pages 72 and 73.
The Company Secretary is Secretary to the Committee. The Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer,
Chief Risk Officer, Finance Director and other senior members of
theFinance Team and Legal Counsel are routinely invited to attend
Committee meetings. The external auditor and Head of Internal Audit
attended all meetings during the year.
The Chair has regular meetings with the Chief Financial Officer,
external audit partner and Head of Internal Audit to discuss key
audit-related topics ahead of each Committee meeting. In addition,
the Committee also meets privately with the external audit partner
and the Head of Internal Audit, at least once a year.
Committee attendance
The Committee meets at least four times a year at appropriate
intervals in the financial reporting and audit cycle and otherwise
as required. The Committee comprises independent Non-
Executive Directors.
Member Position
Meetings
attended / Eligible
meetings
1
Eamonn Flanagan Committee Chair 5/5
Evelyn Bourke Senior Independent Director 5/5
Margaret Hassall
2
Non-Executive Director 4/4
Julie Chakraverty
3
Non-Executive Director 1/1
Fiona Fry
3
Non-Executive Director 1/1
1. Including ad hoc meetings.
2. Margaret Hassall stepped down from the Committee on 11 July 2024.
3. Julie Chakraverty and Fiona Fry joined the Committee on 11 July 2024.
Role and responsibilities
The role of the Committee is to assist the Board in fulfilling its
oversight responsibilities by reviewing and monitoring the:
• integrity of the Group’s financial and narrative statements and
other financial information provided to shareholders;
• Group’s systems of internal controls, including financial
reporting risk;
• Group’s internal and external audit processes and auditors; and
• Group’s processes for compliance with laws, regulations and
ethical codes of practice, the UK Corporate Governance Code
and the FRC Audit Committees and the External Audit:
Minimum Standard.
Full terms of reference for the Committee are reviewed annually
and are available on the Group’s website ajbell.co.uk.
The Committee members receive regular training regarding
matters relevant to their role and responsibilities.
Eamonn Flanagan
Chair of the Audit Committee
Main activities during the financial year
The Committee has an annual cycle of work to ensure that all responsibilities are met over a calendar year. The Committee met five times
during the year. The list below summarises the key items considered by the Committee during the year ended 30 September 2024.
Financial reporting
• Review and approval of Annual Report and
Accounts
• Assessment of Annual Report and
Accounts being fair, balanced and
understandable
• Statement of viability and going concern
• Review of results announcement
• Consideration of regulatory developments
November
External auditor
• Year-end external auditor findings report
and audit opinion
• Review and approval of management
representation letter
• Confirmation of external auditor
independence
Internal audit and controls
• Plan for IT General Controls
• Internal Audit status update on FY24
auditplan
• FY23 Internal Audit opinion
Governance
• Meeting with external auditor without
Executive Directors
• Meeting with internal auditor without
Executive Directors
• Annual meeting with CRO without
Executive Directors
• Annual meeting with CFO without
Executive Directors
• Recommendation to Board on external
auditor reappointment
• Review of Committee annual agenda
Financial reporting
• Review of the limited assurance and
reasonable assurance reports in relation to
CASS
January
External auditor
• CASS findings report and opinion
Financial reporting
• Review of the CASS audit completion
report
• Review of audit timeline for 2024
• Review of key judgements and estimates
for the half-year
• Consideration of regulatory developments
March
External auditor
• Review and approval of fee proposal for
interim review and profit verification
• Scope of the interim review
• Confirmation of external auditor
independence
• Evaluation of external auditor
effectiveness and rigour survey
Internal audit and controls
• Update on IT General Controls
• Internal Audit status update on FY24
auditplan
• Review and approval of the Internal
AuditCharter
• Financial Services Code – gapanalysis
Financial reporting
• Review and approval of Interim Accounts
• Going concern assessment
• Review of results announcement
• Consideration of regulatory developments
May
External auditor
• Interim review findings and review opinion
• Review and approval of management
representation letter
• Confirmation of external auditor
independence
Internal audit and controls
• Update on IT General Controls
• Internal Audit status update on the FY24
audit plan and plan refresh
• Update on Combined Assurance Model
Financial reporting
• Review of key judgements and estimates
for year end
• Review of draft Audit Committee report
for year end
• Consideration of regulatory developments
External auditor
• Review of FY24 audit plan
• External audit update
• Approval of terms of engagement
andaudit fee
• Confirmation of external auditor
independence
September
Internal audit and controls
• Update on IT General Controls
• Internal Audit status update on the FY24
audit plan
• Review and approval of the Annual
Internal Audit plan for FY25
• Annual assessment of internal controls
• Evaluation of internal auditor effectiveness
Governance
• Review findings from Annual Committee
evaluation
• Annual review of Committee terms
ofreference
• Annual review of non-audit services policy
• Review of FRC Quality Inspection Report
2023/24
Strategic report Governance Financial statements Other information
88 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 89
Going concern and viability
The Committee reviewed a detailed paper presented by management
setting out the assumptions underlying the going concern assessment
and viability statements. The paper covered the Group’s expected
future profitability, capital position and liquidity. The Committee also
considered additional stress test scenarios covering a significant
reduction in equity market values, a reduction in interest income and
an idiosyncratic stress relating to a scenario whereby prolonged IT
issues cause a reduction in customer numbers. The Committee also
considered management actions that could be taken in the event that
the modelled scenarios crystallise.
The Committee recommended to the Board that it was appropriate
for the Group to adopt the going concern basis of accounting in
preparing the Annual Report and Accounts for the year ended
30September 2024 and that based on current information they
couldmake the viability statement on page 67.
Fair, balanced and understandable assessment
At the request of the Board, the Committee considered whether
the2024 Annual Report and Accounts, taken as a whole, are fair,
balanced and understandable and provide the information necessary
for shareholders and other stakeholders to assess the Group’s
position and performance, business model and strategy.
The Committee considered the procedures around the preparation,
review and challenge of the Annual Report and Accounts; the
information and reporting it received from management and the
external auditor; and the discussions that took place during the year.
The Committee also considered the narrative sections of the reports
to ensure there was consistency in the information reported, that
appropriate weight had been given to both positive and negative
aspects of business performance and that key messages had been
presented coherently.
Following its review, the Committee is satisfied that the Annual
Report and Accounts are fair, balanced and understandable and
provide the information necessary for shareholders and other
stakeholders to assess the Group’s position and performance and
hasadvised the Board accordingly.
The Directors’ statement on a fair, balanced and understandable Annual
Report and Accounts is set out on page 123.
Client Assets Sourcebook (CASS)
The Committee reviewed the reasonable assurance reports and
limited assurance reports in relation to CASS for all regulated entities
within the Group. The Committee also challenged management as
required on the content and procedures surrounding those reports.
Internal controls
Together with the Risk & Compliance Committee, the Audit Committee
is responsible for monitoring and reviewing the effectiveness of the
Group’s internal control and risk management systems. The Group’s
systems of internal control and risk management are designed to
identify, evaluate and manage rather than eliminate the risk of not
achieving business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss.
Through monitoring the effectiveness of its internal controls, the
Committee is able to maintain a good understanding of business
performance, key judgement areas and management’s decision-
making processes.
During the financial year the Committee:
• reviewed the adequacy and effectiveness of the Group’s internal
controls and internal control systems;
• reviewed the adequacy and effectiveness of financial reporting;
• considered and approved the internal audit plan for the year;
• considered reports from the Head of Internal Audit and specialist
co-sourced partners, challenged the robustness of findings and
agreed actions;
• monitored progress in management’s responsiveness to resolving
audit issues and control recommendations raised;
• reviewed and approved the internal controls and risk management
statements in the Annual Report and Accounts.
During the course of the year, the Committee also received updates
on the Group’s IT general controls, focusing on CASS controls and
the development of an enhanced assessment framework. The
Committee was satisfied with the progress made to date and will
continue overseeing strategies to improve controls and processes
inthis area.
The Committee is satisfied that the Group had appropriate
procedures in place throughout the year and to the date of signing,
which accord with the FRC guidance on risk management, internal
control and related financial and business reporting.
The Board’s statement on internal control and risk management can be
found on page 83.
Internal audit
Following its introduction in FY23, the in-house Internal Audit function
has established itself as a highly regarded business partner on all matters
relating to risk and controls, testing and assurance. The function has
continued to deliver its audit objectives across the business covering a
wide range of topics across all areas including Operations, Technology,
Product, and Risk and Compliance.
The Audit Committee is satisfied that the current target operating
model enhanced with co-source support continues to be appropriate
for the business at this time.
To support the delivery of this year’s annual audit plan, resources
from specialist co-source partners Deloitte LLP and Forvis Mazars LLP
were used on the following assignments:
• Information Technology Governance Review. Deloitte provided a
team of IT Audit resources which supported a review of existing IT
risk and control practices and helped to identify improvement
opportunities across the Group’s IT Governance framework.
• Embedding Consumer Duty. The in-house team was supported by a
specialist team with significant experience of working within the
investment management sector and delivering advisory
engagements in relation to Consumer Duty. This team, also from
Deloitte, was able to share their experiences from across the sector
to help benchmark AJBell’s approach, processes, and controls
against similar organisations and industry good practice.
• Remuneration and Reward Policy Compliance Review. Resources
from Forvis Mazars were engaged to support a mandatory
independent review of the Group’s compliance with its
Remuneration Policy and to validate implementation of the policy
in relation to FY23 fixed and variable pay awards.
Audit Committee report
Financial reporting
Financial statements
One of the core responsibilities of the Committee is to ensure the integrity of the Group’s financial reporting, which includes overseeing the
effectiveness of the financial control environment.
During the financial year, the Committee:
• reviewed the Interim and Annual Report and Financial Statements, and the results announcements and recommended approval by the Board;
• reviewed the clarity and completeness of financial reporting disclosures;
• reviewed reports from management, considered all significant financial reporting judgements for the financial statements and reviewed any
related disclosures;
• assessed the application and appropriateness of significant accounting policies in the year; and
• reviewed the Group’s going concern assumptions and viability statement.
Accounting judgements and significant issues
The Committee assessed and challenged the appropriateness of the judgements and estimates applied by management in the preparation
ofthe Interim and Annual Report and Financial Statements. As part of its review, the Committee considered the following;
Area for consideration Committee review and conclusion
Intangible assets and impairment The Committee reviewed management’s paper to support the carrying amount of intangible assets
held by the Group. The review is supported by Board-approved forecasts and the sensitivities applied
concluded that no impairment was required. The Committee was satisfied with the conclusions.
Goodwill and Cash Generating
Units (CGUs)
The Committee considered the impairment review carried out by management. This included
assumptions on the underlying calculation of the value-in-use of the CGU tested for impairment.
The underlying cash flow assumptions are supported by Board-approved forecasts. The main
assumptions, discount rate and sensitivities are included within note 13 of the consolidated
financial statements. The Committee was comfortable with the assumptions and judgements
made, concluding that the carrying value of goodwill within the financial statements is appropriate.
Share-based payments The Committee reviewed the key assumptions used for the valuation of options granted under
the Company’s share-based incentive schemes. The basis of accounting and disclosures made
were also considered appropriate and consistent with the external auditor’s findings. The
Committee was satisfied that the assumptions used, including the performance period over
which fair values are recognised, were appropriate.
Provisions The Committee reviewed management’s paper presenting the assumptions and calculation
methodologies applied in determining provisions. For the redress provision, judgement is exercised
in relation to the scope of the provision population and the assumptions determining the value of
compensation required.
In addition to considering the appropriate application of IFRS and the recognition principles, the
Committee was satisfied that the procedures performed by management to estimate and quantify
provisions were sufficiently robust.
Further information on the nature of the provisions is included within note 22 of the consolidated
financial statements.
TCFD climate risk reporting Disclosures on climate-related matters are set out on pages 46 to 52 of the Strategic report.
The Committee reviewed the Group’s TCFD climate risk disclosure responsibilities, including the
net zero transition plan and near-term targets, as part of its review of the Annual Report process
for FY24. This review ensured that the reporting met the key statutory and regulatory obligations
with clear ‘comply or explain’ disclosure.
These areas have been discussed with the external auditor to ensure that the Group makes appropriate judgements and provides the required
level of disclosure. Following consideration of the above, the Committee concluded that there are no items that should be classified as
significant or critical judgements in the context of the 2024 Annual Report and Accounts.
Strategic report Governance Financial statements Other information
90 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 91
Other audit reviews undertaken in the year include the following:
Complaint Handling, SIPP Property Administration Processing, CASS IT
General Controls, Investment Operations, Investcentre Adviser Take-on,
Cyber Security Threat and Vulnerability Management, Fraud Risk
Management (focusing on internal fraud), and Change Management.
Risk advisory assignments and other independent engagements were
also performed and included: oversight of a Data Governance
controls improvement programme; supporting the development of
the Risk Management Framework, notably the Group-wide risk
recalibration exercise; and maintaining a watching brief of the annual
Business Planning Process.
In addition to performing audit reviews and providing risk
advisoryservices, the Internal Audit Team took ownership of the
development of the Combined Assurance Model (CAM). Aligned with
both first and second lines of defence, the purpose of the CAM is to
present a consolidated view of each line’s assurance activities in the
understanding, control and management of risk. Internal Audit, with
support from both first and second lines of defence, will continue to
develop, refine and embed the CAM over the coming year where we
expect to see significant progress, including an upgrade of our
supporting risk management technology solutions.
The internal audit plan for the upcoming year is approved annually
inadvance by the Committee. The annual audit plan for FY25 was
approved at the Audit Committee meeting in September 2024.
Thisplan is accompanied by a rolling three-year plan designed to
ensure all critical areas of the business are covered over the period.
The Committee reviews all internal audit reports in order to assess
the effectiveness of mitigating controls and proposed actions by
management to address any issues found. The Committee tracks all
management actions arising to completion.
The Committee met with the Head of Internal Audit without
management present and with management without the Head of
Internal Audit present. There were no significant issues raised during
these meetings.
The Committee conducted its first formal annual effectiveness review
of the Internal Audit function after transitioning to an in-house model
in FY23. The evaluation was completed internally and was supported
by feedback from both the Committee and other Board members,
using a detailed questionnaire to assess the function’s independence,
objectivity, approach, communication and reporting. The Committee
concluded the Internal Audit function is working well and operating
effectively with the appropriate level of skills and experience to
successfully execute its activities.
Alongside the formal review, the Head of Internal Audit conducted a
self-assessment of the function’s performance over its first two years.
Feedback was collected from ExCo and other key stakeholders within
the business. The feedback indicated that the Internal Audit function
is integrating effectively and meeting its responsibilities. Where
opportunities for improvement have been identified, these have been
recorded and ongoing progress will be reported to the Committee.
The Committee also considered the timing for an external
assessment of the Internal Audit function and agreed that this should
take place no later than FY27 in accordance with Global Internal
AuditStandards.
BDO will step down at the conclusion of the 2025 AGM following
theexternal audit tender undertaken last year and the Board will
recommend to shareholders the appointment of PwC for the year
ended 30 September 2025. The Committee will oversee the
implementation of a detailed transition plan and an update will
beprovided in next year’s report.
Non-audit fees
The Committee reviewed and approved the non-audit services policy
for the year. The policy is reviewed annually by the Committee to
safeguard the ongoing independence of the external auditor and
ensure compliance with the FRC’s Ethical Standard.
The Committee recognises that there are often advantages in using
the external auditor to provide certain non-audit services due to their
knowledge of the business. In the event that BDO is engaged to
provide non-audit services, procedures are in place to ensure that the
provision of any such services does not impair the external auditor’s
independence and objectivity.
Prior to undertaking any non-audit service, external auditor
independence is considered together with the nature of the services
and fee levels relative to the audit. The approval of the Committee
must be obtained before the external auditor is engaged to provide
any permitted non-audit services. For permitted non-audit services
that are considered not to be material, the Committee has pre-
approved the use of the external auditor for cumulative amounts
totalling less than £25,000 on the approval of the Chief Financial
Officer and the Chair of the Committee.
Fees for non-audit services paid to the external auditor should not,
inaggregate, exceed 70% or more of the average audit fees for the
preceding three years. Non-audit services for the current year are
well within these limits and represent 12% of the three-year average
statutory audit fee.
During 2024, the external auditor undertook non-audit work in
relation to other assurance services for the review of the interim
results, CASS audit and profit verification work and was paid a total
fee of £262,000 (2023: £175,000). Analysis of the fees paid to BDO
during the current and prior year can be found in note 6 to the
financial statements.
As part of the planning, half-year and full-year processes, the
Committee also received and reviewed an analysis of all non-audit
work provided by BDO in addition to the results of BDO’s own
independence confirmation checks.
The Committee is satisfied that the external auditor’s independence
has not been impaired by their provision of non-audit services.
Committee evaluation
As described in more detail on page 82, an external evaluation of
theBoard and its Committees was undertaken during the year as
required by the UK Corporate Governance Code. The Committee
reviewed the findings which confirmed the Committee continues to
be effective in fulfilling its role and remains independent.
Audit Committee priorities for 2024 / 25
As well as considering the standing items of business, the Committee
will focus on the following key areas during the forthcoming year:
• overseeing the transition of the external auditor to PwC for FY25;
• evolving the disclosures and targets for the Group’s ESG strategy,
including transition to net zero and TCFD targets; and
• considering the impact of the changes to the Corporate
Governance Code with regards to internal controls and any other
regulatory changes or implications, including any future reporting
of the effectiveness of internal controls.
Signed on behalf of the Audit Committee:
Eamonn Flanagan
Chair of the Audit Committee
4 December 2024
External audit
Tenure
This is BDO’s fifth year as the Group’s external auditor following a
formal tender process during 2019 and subsequent appointment at
the 2020 AGM. Neil Fung-On has fulfilled the role of lead audit
partner for a fifth year.
The Committee confirms that the Group has complied with the
requirements of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014 for the
financial year under review.
During 2023, the Company commenced and completed a formal
tender process for the 2025 audit, which was overseen by the
Committee and reported on last year. The tender was conducted in
line with the FRC’s Best Practice Guide to Audit Tendering. In line with
requirements, a tender for the external audit should be undertaken
no later than 2035.
Oversight of external audit
The Committee oversees the relationship with, and work
undertakenby, the external auditor, BDO. The Committee’s
responsibilities include making a recommendation on the
appointment, reappointment and removal of the external
auditorandoverseeing their effectiveness and independence.
TheCommittee assesses the qualifications, expertise, resources
andindependence of the external auditor and the effectiveness
ofthe audit process.
During the year the Committee approved the audit plan, the
proposed audit fee and terms of engagement for 2024. The
Committee also reviewed and challenged reports from BDO which
outlined its risk assessments and audit plans, together with audit
findings and management responses.
The Chair of the Committee has regular contact with the external
audit partner outside of Committee meetings and without the
management of the business present.
The Committee considered the effectiveness of the audit processand
the external auditor’s performance as part of an annual performance
review. Feedback was sought from both Committee members and key
internal stakeholders and focused on the quality and experience of the
audit partner and key audit team, quality of the audit delivery and the
extent and nature of challenge demonstrated by BDO in its work and
interactions with management. The Committee also considered a
report from BDO on its own internal quality control procedures, which
included reference to the outcome of the latest FRC Audit Quality
Review (AQR) for 2023/24 published in July 2024.
Throughout the year, the Committee has maintained close
dialoguewith BDO regarding audit quality and their audit strategy.
This included seeking comments on the latest AQR findings to ensure
that enhancements have been made to address risks identified in
theaudit and the audit firm. The Committee concluded that it was
satisfied with the response from the external auditor, recognising that
improvements had been made to address audit quality and that the
audit was effective.
Audit Committee report
Strategic report Governance Financial statements Other information
92 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 93
Risk & Compliance Committee report
The Committee concluded that the Group continues to have strong
discipline in the management of both emerging and existing risks. The
Committee’s work continues to help support the Group in reviewing the
amount and type of risk it is prepared to take or hold in the context of its
business model and in the course of achieving its strategic objectives.
Further information on the activities of the Committee is provided on
the following page.
Membership
Membership of the Committee is reviewed annually by the Chair
ofthe Committee as part of its annual performance evaluation.
Recommendations for new appointments are considered by the
Nomination Committee, prior to Board approval.
The Company Secretary is the Secretary to the Committee. The Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer,
Chief Risk Officer, Head of Risk, Finance Director, and other members
of the senior management team are routinely invited to attend
Committee meetings.
Dear shareholder
I am pleased to present my first Committee report as Chair of the Risk&
Compliance Committee for the year ended 30 September 2024.
During the year, the Committee considered a wide range of existing and
emerging risk and compliance matters. Key areas of focus included:
• completion of our first annual Consumer Duty assessment, and
ensuring that the Group continues to provide good outcomes for
our customers;
• overseeing the effectiveness of the Group’s Risk Management Policy,
including the Group’s risk appetite categories, principal risks and
uncertainties (PR&U) and key risk indicators (KRIs) andtolerances;
• operational resilience and the Group’s resilience to cyber attacks;
• Internal Capital and Risk Assessment (ICARA) and the potential
impacts of severe economic scenarios on the Group’s business
model and strategy;
• whistleblowing across the Group;
• financial crime prevention, including overseeing the effectiveness
of fraud controls; and
• regulatory horizon scanning for matters impacting the platform
sector and asset management sector.
The Committee receives regular training from subject matter experts;
this year it has received training on the external regulatory landscape,
financial crime and the Senior Manager & Certification Regime, in order
to ensure its knowledge of these areas is appropriate.
Committee attendance
The Committee has four scheduled meetings a year, plus
onefocused ICARA meeting and may meet at other times
asagreedby the Chair or as requested by another member of
theCommittee. The Committee comprises four independent
Non-Executive Directors.
Member Position
Meetings
attended / Eligible
meetings
1
Simon Turner
2
Committee Chair (Chair to
31 March 2024) 2/2
Fiona Fry
3
Committee Chair (Chair
from 31 March 2024) 4/4
Evelyn Bourke
4
Senior Independent Director 4/4
Fiona Clutterbuck Non-Executive Director 5/5
Margaret Hassall
5
Non-Executive Director 1/1
Julie Chakraverty
5
Non-Executive Director 1/1
1. Including ad hoc meetings.
2. Stepped down from the Committee on 31 March 2024.
3. Appointed to the Committee on 7 December 2023 and appointed Chair of the
Committee on 31 March 2024.
4. Stepped down from the Committee on 11 July 2024.
5. Appointed to the Committee on 11 July 2024.
Roles and responsibilities
The role of the Committee is to assist the Board in fulfilling
itsoversight responsibilities by reviewing and monitoring:
• the Group’s attitude to and appetite for risk and its future
riskstrategy;
• the Group’s risk management framework;
• how risk is reported both internally and externally; and
• the processes for compliance with laws, regulations and ethical
codes of practice and prevention of financial crime.
The role and responsibilities of the Committee are set out in
formal terms of reference, a copy of which can be viewed on the
Group’s website ajbell.co.uk.
More detail on the Group’s approach to managing risk is detailed
in the risk management framework section of the Annual Report.
Fiona Fry
Chair of the Risk &
Compliance Committee
Main activities during the financial year
The Committee has an annual cycle of work to ensure that all responsibilities are met over a financial year. The list below summarises
themain activities considered by the Committee during the year ended 30 September 2024.
Risk management framework
• Review and approval of risk appetite
categories and statements
Risk reporting
• Review of the CRO report
• Review and approval of the KRIs linked to
risk appetite categories and PR&U
• Review of information security reporting
• Review of financial crime reporting
November
Consumer Duty
• Consumer Duty deep dive
Operational resilience
• Operational resilience deepdive
• Cyber security deep dive
Whistleblowing
• Review and approval of the annual
whistleblowing report and policy
Client money and assets
• Review of the client money and
assetsreport
ICARA
• Review of ICARA document, including
liquidity risk assessments, recovery
planning and the wind-down plan
Regulatory items
• Review of risk sections in annual report
Executive performance andrisktaking
• CRO year-end report
Operational resilience
• Operational resilience update,
includingreview of self-
assessmentand2
nd
line review
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
categories and PR&U
• Review of information security reporting
March
Data
• Data risk deep dive
Client money and assets
• Review of the client money and
assetsreport
Financial crime
• Review of annual report by the Money
Laundering Reporting Officer
• Fraud controls
Data protection
• Review of annual report by the Data
Protection Officer
ICARA
• Review of process and timetable
Executive performance and risktaking
• CRO mid-year report
Risk management framework
• Review and approval of the Group Risk
Management Policy
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
categories and PR&U
• Review of information security reporting
May
Consumer Duty
• Consumer Duty deep dive
Operational resilience
• Cyber security deep dive
Non-standard investments
• Deep dive on non-standard investments
Client money and assets
• Review of the client money and
assetsreport
ICARA
• Review of process and annual summary
ofliquidity management
Regulatory items
• Review of risk sections inhalf-yearreport
CARA
• Review and challenge of material harms,
liquidity and stress testing
Risk reporting
• Review of the CRO report
July
• Review of KRIs linked to risk appetite
categories and PR&U
Regulatory items
• Review of Consumer Duty annual board
assessment
Committee evaluation
• Annual Committee evaluation
Risk management framework
• Review and approval of the annual risk and
compliance plan
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
categories and PR&U
• Review of information security reporting
• Review of financial crime reporting
Operational resilience
• Transfers out deep dive
September
Client money and assets
• Review of the client money and assets
report
Combined assurance model
• Review of assurance (including control
effectiveness review)
ESG and TCFD
• Review of climate scenario analysis
Financial crime
• Review of fraud controls
ICARA
• Review and approval of material harms,
liquidity and stress testing
Regulatory items
• Review of risk sections in annual report
• Regulatory horizon scanning
Executive performance and risktaking
• CRO pre-performance year-endreport
Strategic report Governance Financial statements Other information
94 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 95
Key areas of focus
Regulatory items
The Committee has reviewed preparation for and implementation
ofregulatory initiatives through the year. There has been continued
focus on the Group’s implementation and embedding of Consumer
Duty requirements to ensure the delivery of good customer outcomes.
Another focus has been the implementation of the Sustainability
Disclosure Requirements to support investors in making informed
decisions on sustainable product holdings. The Committee receives
regulatory horizon scanning and exercises oversight of other key
regulatory initiatives, such as the Group’s progress on reducing
transferout times. The Committee also maintains oversight of
regulatory interactions to support our open and collaborative
relationship with the FCA.
Risk management framework
The Acting Risk and Compliance Director, who was supporting
theChief Risk Officer (CRO) whilst on maternity leave, provided the
annual assessment of Risk and Compliance functions in September
2024 and confirmed good progress had been made with the delivery
of both the Risk and Compliance plans over the previous financial
year. The Committee approved the annual Risk and Compliance
plans in September 2024. The Committee conducted its annual
review of the Group Risk Management Policy in May 2024 and
approved the Policy with minor amendments.
The risk appetite categories and the PR&U are reviewed annually
afterthe Board strategy and budget have been approved and the
appropriate KRIs and tolerances are then set. The associated KRIs
andtolerances are monitored at each Committee meeting.
Risk reporting
Risk reporting is included in the Group’s Quarterly CRO report.
Thisincludes details of underlying KRIs mapped to the risk appetite
categories and the PR&U, a summary of all the Group’s risks and
controls, breaches, risk events and emerging risks.
Combined Assurance Model
The purpose of the Combined Assurance Model (CAM) is to
monitorthe consistency of approach, completeness of coverage and
co-ordination of activities of the Risk, Compliance and Internal Audit
functions. All of the Group’s risks and controls are recorded in the
Group’s risk register. Each business area is responsible for performing
a Risk and Control Self-Assessment (RCSA), reviewing this assessment
on an ongoing basis and providing an annual RCSA attestation.
Depending on this assessment, the business area will determine
whether action is required to improve the controls to ensure the
relevant risk is brought back or remains within appetite. The second
(Risk and Compliance) and third (Internal Audit) lines of defence then
co-ordinate their assurance activities across the key areas of risk
across the Group. The assurance output has been reviewed by
theCommittee, in conjunction with the Audit Committee, over the
course of the financial year. The annual risk and compliance plans are
reviewed and approved taking into consideration the findings from
the CAM.
Operational resilience
The Group has tracked initiatives to further improve the Group’s
operational resilience, including improving the Group’s disaster
recovery capabilities. In respect of key cyber threats, the Committee
reviewed information from internal subject matter experts on the
strength of corresponding key controls. The Committee also sought
assurance and cyber security threat testing from third-party cyber
security companies to ensure the Group’s cyber defences are
working appropriately.
Executive performance and risk taking
The Committee reviews any relevant events where material
failuresorpoor performance contributed to, or failed to prevent,
thecrystallisation of risk. Any such matters are referred to the
Remuneration Committee for consideration of adjustment to annual
bonus awards, where appropriate. No incidents and issues arose in the
year due to disregard of risk management practices, misconduct or
excessive risk taking.
Committee evaluation
The Committee participated in the external Board effectiveness
review in the months leading to May 2024. The outcome of the
review was presented to the Committee in July 2024, which
confirmed the Committee is operating effectively.
Risk & Compliance Committee priorities
for2024/25
The Committee will continue to focus on any emerging risks that
maymaterialise. Key areas of focus over the next financial year will
bemonitoring the continued embedding of the Consumer Duty,
reviewing continued enhancements to financial crime and fraud
controls, monitoring risk exposure versus appetite, and continuing to
work collaboratively with the Audit Committee to refine and embed
the Combined Assurance Model.
Fiona Fry
Chair of the Risk & Compliance Committee
4 December 2024
Whistleblowing
The Group promotes a culture of openness with its employees and
where there are concerns, encourages them to utilise the various
means available to speak up. The Group recognises that employees
may not feel comfortable reporting their concerns through an
internal channel and therefore provides access to an external
whistleblowing service. A formal whistleblowing policy is in place and
was reviewed by the Committee in November 2023 alongside the
annual whistleblowing report for consideration.
At the time of the review, Simon Turner, who was Chair of the
Committee until 31 March 2024 at which point he stepped down
from the Board, also held the role of the Whistleblowing Champion
and was responsible for overseeing the integrity and effectiveness
ofthe regime. When Simon stepped down from the Board, the
responsibility for overseeing the adequacy of whistleblowing
arrangements in the business moved to the Audit Committee and
subsequently, Eamonn Flanagan, Chair of the Audit Committee,
wasappointed the Whistleblowing Champion.
Client money and assets
The Committee reviews a quarterly Client Assets Sourcebook (CASS)
report, which details the effectiveness of systems and controls for
CASS and progress on the ongoing initiatives to automate and
improve the Group’s CASS processes.
Task Force on Climate-related Financial Disclosures
(TCFD)
The Committee has reviewed the Group’s material climate-related
risks and opportunities and climate-related scenario analysis.
Financial crime
The Committee received and reviewed its annual report from the
Money Laundering Reporting Officer (MLRO) in March 2024 which
confirmed the Group’s anti-money laundering and fraud controls are
adequate. The Group is devoting additional resources to further
improve its fraud control environment. The Committee monitors
theeffectiveness of the Group’s anti-money laundering and fraud
systems as part of its quarterly risk reporting and bi-annual financial
crime deep dives.
Data protection
The Committee received and reviewed the annual report from the
Data Protection Officer (DPO) in March 2024. A Data Forum is in
place to oversee the ongoing maturity of the data protection and
privacy framework.
ICARA
The Group has conducted ICARA scenario workshops with
subjectmatter experts (SMEs) from across the Group to assess the
material harms that the Group and its customers may be exposed to.
Non-Executive Director meetings have been held with SMEs to assist
in the review and challenge process. The Committee convened in
July to review and challenge the output, with the revised output
being subject to further review and challenge by the Committee in
September. The Committee has also reviewed stress testing, recovery
planning and wind-down planning assessments.
Risk & Compliance Committee report
Strategic report Governance Financial statements Other information
96 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 97
Directors’ Remuneration report | Annual statement by the Chair of the Remuneration Committee
Dear shareholder
As Chair of the Remuneration Committee, I am pleased to present
the Directors’ Remuneration report for the year ended 30 September
2024. We also present our proposed Directors’ Remuneration Policy
(the ‘Policy’) which, in line with regulations, will be subject to a
binding vote at the 2025 AGM. This report therefore sets out the
Policy, details of the approach to the implementation of the Policy in
the forthcoming year (subject to shareholder approval) and amounts
earned in respect of the 2024 financial year.
The report provides a comprehensive overview of the structure of
our remuneration framework and its alignment with the business
strategy and the rest of the workforce. Additionally, it sets out how
the Committee has addressed its responsibilities during the year and
explains the rationale for our decision making.
Business context
AJBell has consistently demonstrated the strength of its dual-
channel platform and diversified revenue model. This has delivered
strong financial returns for shareholders, whilst also supporting
continued investment into our brand, technology and products to
deliver on our significant growth opportunity.
Our platform now serves over half a million customers with platform
AUA now standing at a record £86.5 billion, up 22% over the last year.
Our investments business also continues to go from strength to strength
with AUM reaching £6.8 billion, a 45% increase on the prior year. We are
committed to investing in support of our long-term growth ambitions –
AJBell’s brand awareness has improved, and we continue to enhance
our customer proposition, including the recent launch of our Ready-
made pension and the lowering of charges for customers from 1 April.
Lastly, a new capital allocation framework has been approved which
reinforces our commitment to targeting further growth in our annual
ordinary dividend. We have increased our dividend for the 20
th
successive year and initiated a share buyback programme to return
upto£30 million of surplus capital to shareholders.
We continue to see significant opportunities for growth in the platform
market and believe we are well-positioned to capitalise on these in both
the advised and D2C segments and to further increase our market share.
As explained later in the report, the Committee took this strong
performance into consideration when discussing and approving
incentive outcomes.
EIP outcomes for FY24
This year has seen strong results in all areas, with revenue increasing
by 23% to £269.4 million and PBT up to £113.3 million, representing a
29% year-on-year growth rate. This growth has been driven by strong
net AUA inflows of £6.1 billion and a 14% increase in platform
customers, outperforming target thresholds.
In considering the extent to which the Executive Directors’ EIP awards
vested, the Committee assessed performance against the targets set
alongside the findings of the CRO risk report, in which no adverse
findings were reported. The Committee also considered relevant
external market conditions and the quality of earnings delivered.
Based on the Committee’s assessment, Michael Summersgill’s EIP
awards as CEO vested at 74%, Peter Birch’s as CFO at 74% and Roger
Stott’s as COO at 65% of maximum. Further details of the outcomes can
be found on pages 113 to 115 of the Annual Report on Remuneration.
The Committee is satisfied that our Executive Directors have
continued to deliver tangible and substantial benefits for the business
and our shareholders, and have delivered strong performance against
stretching targets, as our results attest.
Review of Remuneration Policy and
rewardprinciples
When our current Directors’ Remuneration Policy was approved at the
2023 AGM with over 98% of votes in favour, we acknowledged that the
positioning of the packages for our Executive Directors had fallen behind
the market. We have sought to address our low market positioning over
the last few years in a considered way. In particular:
• The current Policy introduced a higher incentive opportunity
under the EIP (270% for the CEO and 250% for the CFO and COO)
for more stretching performance.
• Peter Birch’s salary was increased from £310,000 to £385,000 last
year, positioning his fixed pay at the lower quartile of FTSE 250
financial services companies (excluding banks). This increase
reflected his strong personal performance and contribution since
he joined AJBell on 1 July 2022 and the increased scope and
responsibilities of his role, having assumed responsibility for both
the Treasury and HR functions.
At the time we reviewed our Remuneration Policy in 2022, we stated
that the Committee intended to keep Executive Director remuneration
under review in future years to ensure we can continue to attract and
retain the calibre and experience of individuals needed to deliver the
Group’s growth ambitions.
As we have taken a phased and prudent approach, we have faced several
challenges in terms of senior management recruitment and retention due
to our low market positioning, which have been highlighted following
changes in the composition and membership of both our Board and
executive team and associated recruitment activity undertaken. The
feedback we received from several recruitment partners during the year
indicated that our low pay positioning was preventing us from attracting
the widest pool of potential talent for our business. Furthermore, some
candidates had ruled themselves out of our recruitment processes as
wecould not meet their package expectations. Fortunately, this year
wehave still been able to fill positions with high calibre candidates
whohave joined the business attracted by our reputation, strong
cultureand growth ambitions.
The packages for the Executive Directors and senior executive
teamremain below lower quartile compared to other FTSE 250
financial services companies (excluding banks). Our variable pay
remains significantly out of line with the market for some senior roles
interms of both quantum and cashflow, particularly given our peers
deliver part of their annual bonus in cash.
As a result, the Committee concluded that it was appropriate to review
the market competitiveness of our Directors’ remuneration packages.
In reviewing the remuneration packages, we seek to address our low
market positioning through increasing the variable elements which are
subject to performance, further aligning the interests of the Executive
Directors with shareholders. Taking a phased approach, as we have
done previously, was not considered appropriate at this time for a
number of reasons. Firstly, as the changes are considered to be modest
relative to market maximum compensation levels. Secondly, phasing
would not enable us to address the disparity in our pay positioning
relative to market within an appropriate timescale, and potentially
cause us to fall further behind.
Following this review, we are asking shareholders to approve a new
Directors’ Remuneration Policy at the AGM in 2025, ayear earlier than
required. At that AGM, we will also be asking shareholders to approve
amendments to the EIP so that it is aligned with the new Directors’
Remuneration Policy.
Summary of proposed changes to AJBell’s
Remuneration Policy
Since our IPO in December 2018, we have operated a single incentive
plan, the EIP, which was considered appropriate given the nature of our
business model where a high proportion of operating profit is converted
into cash in the year that it is generated.
This approach received very high levels of support from shareholders
when the policy was established and subsequently renewed. However,
during the Committee’s policy review, alternative incentive arrangements
were considered including separate long-term incentive models.
We concluded that the EIP remains appropriate given the nature of
AJBell’s business, noting also that the plan maintains alignment with the
long-term goals of shareholders as EIP performance targets measure
both in-year performance and actions taken to support long-term
sustainable value creation. However, we will continue to keep this under
review in the coming years.
In a competitive market, talent attraction and retention is a key priority
for AJBell. As such, we consider it essential to make the following
changes to the operation of our EIP for senior management for FY25
so that our remuneration offering remains competitive and that we are
seen as an employer of choice:
• Increase the maximum EIP limit within the Policy from 270% to400%
of salary. This will provide additional headroom for improving our
competitive positioning and takes into account the increases being
made to below Board participants of the EIP. For FY25, the maximum
EIP award will be increased from 270% to 400% of salary for
theCEOand from 250% to 350% of salary for the CFO. Taking into
account the impact of these changes, the total incentive opportunity
will still be towards the lower end of the market for total incentive
opportunity relative to our FTSE 250 financial services peer group.
The Committee considers this peer group to be the most appropriate
comparator group of companies within our industry (with banking
organisations excluded) with a similar size and complexity (AJBell’s
market capitalisation is around the median of this group)
1
.
• Increase the deferred element from 60% to 67% of the total
EIPaward for Executive Directors, with the annual award
reducingfrom 40% to 33% of the total EIP award.
• Change the annual award to a payment in cash, replacing the
currentapproach of the annual award being made entirely in shares.
This removes the impact of short-term share price fluctuations on
annual awards and moves our cash compensation closer towards
market norms, given annual bonuses across the market are typically
delivered in cash rather than shares. This change addresses the
current lack of a cash component of variable pay.
• Increase shareholding guidelines in line with the maximum EIP
quantum (i.e. for FY25, 400% of salary for the CEO and 350% of salary
for the CFO), further aligning the interests of the Executive Directors
with those of shareholders. It should be noted that our Executive
Director shareholding guidelines are already at market leading levels
of 350% of salary for the CEO and 300% of salary for the CFO.
The proposed Policy retains the following best practice features
aligned to shareholder interests:
• Using a balanced scorecard of performance measures (including
both financial and non-financial) that are focused on delivering
long-term sustainable performance (with targets measuring in-year
performance and actions taken to support long-term sustainable
value creation). Whilst performance is assessed over a single
financial period, multi-year performance is reflected through
asignificant proportion being deferred and subject to a robust
performance underpin.
The measures linked to the KPIs and strategy of the business, over the
financial year ending 30 September 2025 as set out below:
Financial
(35%weighting)
Growth and non-financial
measures (40%weighting)
Strategic initiatives
(25%weighting)
Revenue
PBT
PBT margin
AUA inflows
Customer retention
Customer experience
Staff engagement
Including but not
limited to:
The delivery of key
projects in the year
• On-target performance will result in 50% of the EIP award vesting.
Maximum vesting will continue to require significant out-
performance, taking into account internal and external forecasts and
market conditions. The Committee will also ensure that the outturn
reflects the underlying performance of the business.
• Retention of the five-year timeframe for the deferred share element.
• Post-cessation shareholding requirement aligned with best practice.
We consider that this, together with our clear and robust
frameworkforsetting targets and for measuring and assessing
performance objectively, allows us to reward executives appropriately
for both their own contribution and the performance of the Group.
The Committee retains the discretion to override mechanical
assessment ratings if it considers them to have resulted in inappropriate
award outcomes and has, on occasion, exercised such discretion.
Committee attendance
The Committee meets at least twice a year and may meet at
other times as agreed by the Chair or at the request of another
member of the Committee.
Member Position
Meetings
attended / Eligible
meetings
1
Margaret Hassall Committee Chair 5/5
Fiona Fry
2
Non-Executive Director 2/3
Fiona Clutterbuck
3
Non-Executive Chair 4/4
Eamonn Flanagan
3
Non-Executive Director 3/4
Evelyn Bourke
4
Non-Executive Director 1/1
Julie Chakraverty
4
Non-Executive Director 1/1
Simon Turner
5
Non-Executive Director 1/1
1. Including ad hoc meetings.
2. Fiona Fry joined the Remuneration Committee on 22 May 2024. She was
unable to attend a meeting arranged at short notice.
3. Fiona Clutterbuck and Eamonn Flanagan stepped down from the
Remuneration Committee on 11 July 2024. Eamonn was unable to attend an
ad hoc meeting arranged at short notice.
4. Evelyn Bourke and Julie Chakraverty joined the Remuneration Committee
on11 July 2024.
5. Simon Turner stepped down from his position of Non-Executive Director on
31March 2024.
The Company Secretary is secretary to the Committee. The
Chief Executive Officer, Chief Financial Officer, HR Director
andour external advisers, Deloitte, are also routinely invited to
attend Committee meetings. No Director was present during
the meeting where their own remuneration was discussed.
Margaret Hassall
Chair of the Remuneration
Committee
1. The constituents of the comparator group are abrdn, Ashmore, Bridgepoint, Caledonia
Investments, CMC Markets, Direct Line, Hiscox, IG Group, Integrafin, IP Group, JTC,
Jupiter Fund Management, Just Group, Lancashire Holdings, Man Group, Molten
Ventures, Ninety One, Plus500, Quilter, Rathbones, Law Debenture Corporation,
TPICAP and Witan Investment.
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98 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 99
Directors’ Remuneration report | Annual statement by the Chair of the Remuneration Committee
When exercising its discretion, the Committee takes into account
areport from the Chief Risk Officer on whether any undue risk is
considered to have been taken to achieve objectives.
The performance graph and historical CEO remuneration outcomes
on page 117 demonstrate that the EIP has been successful in
rewarding long-term sustainable Company performance.
Board and senior management changes
As announced on 10 September 2024, our COO Roger Stott will be
retiring and stepping down as an Executive Director on 31 December
2024. He will receive payments in respect of salary, pension and benefits
until his six-month notice period ends and his outstanding deferred
awards will continue to vest in full at the normal time as a good leaver in
line with the current and proposed Remuneration Policies, subject to the
achievement of the performance underpins applicable to each award.
The relevant holding periods on these awards would also continue to
apply. He will not participate in the FY25 EIP.
The CFO, Peter Birch, and Chief Technology Officer, Mo Tagari, will
assume the FCA Senior Manager Function responsibilities ofthe Chief
Operations Function (SMF 24) subject to regulatory approval. Peter
continues to serve on the Board as an Executive Director, having
been appointed as CFO in 2022.
AJBell also welcomed to the Board Fiona Fry on 7 December 2023,
andJulie Chakraverty on 1 June 2024 as Non-Executive Directors.
Fionahas assumed the role of Chair of the Risk & Compliance Committee,
succeeding Simon Turner who stepped down as Non-Executive Director
on 31 March 2024 following nine years’ service on the Board.
Executive Director fixed pay increases forFY25
As part of the remuneration review, we have also reviewed fixed pay
forour Executive Directors. Whilst base salaries for Executive Directors
remain materially below market, the Committee is pleased to propose a
salary increase for Michael Summersgill and Roger Stott for FY25 of 3% in
line with the standard increase for the wider workforce.
A 10% salary increase is proposed for Peter Birch, from £385,000
to£425,000 recognising the current low market positioning and
significant additional responsibilities being assumed by Peter following
the retirement of Roger Stott. Peter’s base salary after the change
willbe positioned between lower quartile and median.
Executive Directors will also benefit from the 1% pension contribution
uplift and the removal of the employer pension cap which were
implemented on 1October 2024 for the wider workforce.
Impact of changes on total compensation
The Committee is mindful of the impact of the proposed increases
on the value of the total remuneration package. Thechanges
outlined above are still considered to be modest considering
maximum compensation levels relative to the market.
Compared to FTSE 250 financial services companies (excluding
banks) the total remuneration for our Executive Directors will be
positioned between lower quartile and median. The Committee
intends to keep this under review in future years to ensure we can
continue to attract and retain the calibre and experience of
individuals needed to deliver the Group’s growth ambitions.
The Committee believes that the above changes are consistent with
our aim to reward appropriately strong long-term performance and
are, therefore, in the best interest of the Company’s shareholders.
AJBell is a high-performing business, and we believe that increasing
the remuneration packages of our top executives is necessary to help
us retain our leadership talent.
Chair and Non-Executive Director
Remuneration for FY25
Under delegated authority from the Board, the Executive Directors and
the Chair have reviewed fees for the other NEDs taking into account the
increased scope of their roles, responsibilities and time commitments.
The Chair fee was reviewed by the Remuneration Committee.
The NED base fee agreed for FY25 is £70,000, which brings the fee in
line with the median of the market compared to FTSE 250 financial
service companies (excluding banks). NED fee increases for FY26 are
not expected to exceed the standard increase for the wider workforce.
The Chair fee for FY25 will increase by 3% (from £225,000 to
£231,750) in line with the standard increase for the wider workforce,
with a marginal increase to the SID fee to £15,000. No changes are
being made to the Committee Chair fees.
Engagement with shareholders
We are committed to maintaining an open and transparent
dialoguewith our shareholders. We have consulted the Company’s
topshareholders representing c. 71% of the share register and the main
proxy voting advisory agencies on the new Policy and our Executive
Director remuneration arrangements. We met with shareholders
whowished to discuss the proposals in more detail and responded
inwriting to those requesting more information. Of the shareholders
consulted, the majority gave positive feedback regarding the
proposedchanges to the Remuneration Policy.
As part of the consultation exercise, a number of shareholders
requested further information on how the proposed quantum
wasdetermined and how we consider longer-term performance.
Asnoted on the previous page, the proposed quantum is still
towardsthe lower end of market compared to our peers. With
respect to longer-term performance, the proposed scorecard
provides a balance between measuring achievements in the year
andrewarding actions for delivering sustainable long-term growth
(such as AUA inflows and customer retention). The Committee’s
consideration of the vesting of the deferred awards takes into
account a number of factors including the relative Total
ShareholderReturn (TSR) performance of the company.
The Committee considered this feedback and made no changes to
theproposals.
Alignment with wider workforce
Pay and benefits
The Committee reviews information on wider workforce
remuneration, provided by the HR Team, which oversees the
annualpay review and performance review process. Executive
remuneration and other employees’ salaries are reviewed following
the same process and include both fixed and performance-related
elements. This process includes benchmarking against similar
financial services organisations and considers factors such as local
recruitment conditions.
Over the past two years, we have committed to a cumulative >20%
increase in staff reward in response to external conditions such as the
cost of living and recruitment competition, as well as enhancements
the Company has decided to make to its pay and benefits offer.
A new pay framework was implemented on 1 April 2024 with more
than 400 employees receiving an average increase of 6.7% from that
date (in addition to the 5% increase in October 2023).
The standard base salary increase for FY25 (effective 1 October 2024)
is3% plus an additional 1% pension contribution uplift, with enhanced
increases for approximately 25% of staff where their pay may have
fallen below appropriate levels or in recognition of high performance.
This means that the average pay award given to staff was c. 4%.
Duringthe year 99% of the wider workforce below Board and
Executive Committee level also received a bonus award.
All staff will also be eligible to receive their annual free share award
ofup to £2,000 based on strong company performance.
Alongside the annual free share award, we operate a Buy As You
Earnscheme for all staff in which they can buy shares in the company
out of pre-income tax and National Insurance pay, within HMRC-
approved limits. During the year approximately 30% of our workforce
actively participated in the plan.
Our share schemes hold significant value for our staff and support
our reward principle by enabling everyone to share in the growth in
value of the Company through equity participation; helping to aid
staff retention and to align the interests of our wider workforce with
those of our shareholders.
We are also enhancing our family friendly benefits for our workforce
in FY25, including up to five days paid leave for employees
undergoing fertility treatment.
Employee Voice Forum (EVF)
Positive, meaningful staff engagement is key to realising our strategic
objectives. The EVF enables staff to understand emerging themes in
the business and allows the voice of staff to be heard within the
Board’s decision-making process.
The EVF met throughout the year to discuss several topics including our
employee value proposition, which touched on pay and progression,
and the role of AI in the workplace. We also engaged with the staff via
our intranet to raise awareness and invite feedback on the work of the
Remuneration Committee, including how executive pay is set and
aligned with the wider company pay policy.
We took part in the Great Place to Work survey for the first time
thisyear, giving staff the opportunity to tell us how it feels to work
atAJBell.
We are pleased to report strong results, being certified as a Great
Place to Work with a total score of 83%, well in excess of the 65%
accreditation threshold, placing us amongst the best large
companiesin the country.
Gender pay
Our latest gender pay data published in 2024 reflects the position as
at April 2023. It is encouraging to see that our mean and median gaps
for pay and bonuses paid have continued to improve.
This reflects the progress we are making in addressing the gender
profile of our workforce and is a continuation of the work we have
been doing for the past several years, supporting more women to
progress into senior roles in all areas of the business. For example, this
year through internal succession planning we saw the promotion of
Kina Sinclair onto our Executive Committee as Group Legal Director.
The Group’s gender pay gap report can be found at ajbell.co.uk.
CEO pay ratio
The median ratio for the CEO’s salary and total remuneration
compared to our employees was 17:1 and 57:1 respectively and
further details can be found on pages 118 and 119 of the Annual
Report on Remuneration. The median ratio for the CEO’s salary is the
same as last year’s figures and the increase in the total remuneration
ratio reflects the increase in the maximum EIP opportunity and the
strong performance delivered in FY24.
A significant proportion of the CEO’s pay is in the form of variable pay
through the EIP. As a result, the CEO pay will vary year-on-year based
on Company and share price performance, as will the CEO to
all-employee pay ratio.
Share plan proposals at the AGM
As referred to on page 99, at the 2025 AGM shareholders will also be
asked to approve amendments to the EIP.
The proposed amendments to the EIP will reflect the new Policy (for
example the higher EIP opportunity, and the payment of the annual
awards in cash) and the intended operation of the EIP. At the AGM we
will also be asking shareholders to approve amendments to our Senior
Manager Incentive Plan (SMIP). This is a separate incentive plan which
was approved at the 2023 AGM and which is used to incentivise and
retain key employees below executive management level and in which
the Executive Directors are not eligible to participate. The Notice of
AGM will include a summary of the proposed changes to both the EIP
and the SMIP.
Shareholder views
I would like to thank our shareholders and investor bodies for their
continued support and engagement during the year. As we considered
our proposals for the new Policy, the Committee had the opportunity to
consult with institutional shareholders representing more than 70%of
the shares in the Company. The Committee is grateful to shareholders
for the time and input during the consultation process and positive
feedback we received, which has greatly contributed to a more
robustdecision-making process.
We recognise that our pay positioning has fallen behind the market for
our Executive Directors, and seek to address this through increasing
the variable element of pay which is subject to performance. These
changes are considered necessary for retaining and attracting top
talent needed to deliver the Group’s growth ambitions, whilst
remaining aligned with the long-term goals of shareholders.
I welcome feedback at any point in time from our entire shareholder
base regarding our Policy and its application, and I hope that we will
earn your support at the forthcoming AGM.
Yours sincerely
Margaret Hassall
Chair of the Remuneration Committee
4 December 2024
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100 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 101
Introduction
The Group’s proposed new Directors’ Remuneration Policy (the ‘Policy’) is set out following this introduction and the summary of the alignment
of the Policy with the UK Corporate Governance Code.
The Policy has been determined by the Company’s Remuneration Committee (the ‘Committee’). The Policy is aligned with our reward
principles, set out below, which apply throughout the Group:
Alignment with our
culture and growth
strategy
• Aligned with our purpose, principles and strategy promoting our culture and long-term sustainable
value creation.
• Executives and wider workforce to share the growth in value of the Company through equity participation.
Supporting talent
attraction and retention
• Market-competitive base salaries and benefits which reflect the size and complexity of the business
and the calibre and experience of individuals in each role.
• Recognise and reward strong performance and individual contribution, with an appropriate
proportion of package linked to financial and non-financial performance.
Simple and transparent
• Approach to reward that is well understood.
• An incentive plan (EIP) for Executive Directors and Executive Committee which is designed to
promote long-term sustainable value creation.
Good governance and
riskmanagement
• Following good corporative governance and regulatory requirements.
• In line with the Company’s risk appetite and risk management framework, including having taken into
consideration environmental, social and governance risk factors.
The approach taken by the Committee to the determination of the new Policy and the differences between the new Policy and the policy
approved by shareholders at the 2023 AGM are described in the statement from the Remuneration Committee Chair earlier in this Directors’
Remuneration Report.
Alignment with the UK Corporate Governance Code
In determining our Policy, the Committee addressed the following six principles, as set out in the UK Corporate Governance Code:
Clarity
• The Remuneration Policy has been designed with a clear and robust framework for setting targets
and for measuring and assessing performance objectively, aligned to our business model / cycle, to
ensure we reward executives appropriately for both their own contribution and the performance of
the Group.
• Our Policy clearly aligns the interests of the Executive Directors, senior management and employees
with those of shareholders and wider stakeholders, as well as our purpose, guiding principles
andstrategy.
Simplicity
• We operate a single incentive plan for our Executive Directors, the EIP, which is designed to promote
and reward long-term sustainable Group performance.
Risk
• Our approach aims to ensure that remuneration and incentives adhere to the principles of good
corporate governance and the FCA Remuneration Code, and support good risk management
practice.
• Malus and clawback provisions apply to executive rewards.
• Deferred awards are also subject to a performance underpin which is linked to the underlying
performance of the Group, risk management, conduct and compliance over the three-year
deferralperiod.
• The Committee retains discretion to override mechanical assessment ratings to take account
ofperformance and / or wider circumstances, which could include any concerns over risk
management.
Predictability
• All executives are set clear financial and non-financial targets at the start of the year.
• For Executive Directors, two-thirds of the EIP awards will be delivered in shares with awards granted
at the start of the financial year based on the share price at the date of grant.
Proportionality
• Executives are assessed against financial and non-financial objectives, which are based on long-
term sustainable performance.
• The Committee retains the discretion to override mechanical assessment ratings, to take account of
performance and / or wider circumstances.
Alignment to culture
• A proportion of executive awards are based on non-financial performance objectives aligned
withour purpose, principles and strategy, including those specifically related to our culture such
asstaff engagement.
The Policy
This part of the Directors’ Remuneration Report sets out the Group’s Directors’ Remuneration Policy (the ‘Policy’), which, subject to shareholder
approval at the 2025 AGM, will take binding effect from the close of that meeting.
Policy for Executive Directors
Component
Purpose and link to
strategy Operation Maximum opportunity Performance measures
Base salary
Core element of fixed
remuneration reflecting
the individual’s role and
experience.
The Committee ordinarily reviews
base salaries annually taking into
account a number of factors
including (but not limited to) the
value of the individual to the
business, the scope of their role,
their skills, experience and
performance.
The Committee also takes into
consideration:
• pay and conditions of the
workforce generally; and
• Group profitability and
prevailing economic
conditions.
Whilst the Committee does not
set a maximum permissible base
salary, it does have regard to
relevant comparators in approving
salary levels. Increases will not
normally exceed the range of
salary increases awarded (in
percentage of salary terms) to
other employees of the Group.
However, higher increases may be
awarded in appropriate
circumstances, such as:
• on promotion or in the event
of an increase in scope of the
individual’s role or
responsibilities;
• where an individual has been
appointed to the Board at a
lower-than-typical market
salary to allow for growth in
the role, in which case larger
increases may be awarded to
move salary positioning to a
typical market level as the
individual gains experience;
• change in size and / or
complexity of the Group; and /
or
• significant market movement.
Increases may be implemented
over such period as the
Committee deems appropriate.
Whilst no performance conditions
apply to fixed remuneration, an
individual’s performance in role is
taken into account in determining
any salary increase.
Benefits
To provide fixed
remuneration on a
market-competitive basis
to enable the retention of
Executive Directors to
deliver the Company’s
strategy.
Benefits include medical cover for
the Executive Director and their
spouse and dependent children
and life assurance scheme.
Other benefits may be provided
based on individual
circumstances, which may include
company car or allowance,
relocation costs or allowances,
travel and accommodation
expenses.
Reimbursed expenses may
include a gross-up to reflect any
tax or social security due in
respect of the reimbursement.
The Committee has not set a
maximum on the level of benefits
Executive Directors may receive.
The value is set at a level which
the Committee considers to be
appropriate taking into account
the nature and location of the role
and individual circumstances.
Not applicable.
Retirement
benefits
To provide a competitive
means of saving to deliver
appropriate income in
retirement.
An Executive Director may receive
a salary supplement in lieu of
some or all of the contributions
that would otherwise be made to
a pension scheme.
The Company may make a
contribution to a defined
contribution scheme or a
personal pension.
The maximum value of any
employer pension contributions
(or cash in lieu of a pension
contribution) for Executive
Directors will be aligned to the
rate available to the majority of
the wider workforce, as
determined by the Committee.
In addition, Executive Directors
may be permitted to sacrifice
other elements of remuneration
and receive an equivalent
contribution to a pension scheme.
Not applicable.
Directors’ Remuneration report | Directors’ Remuneration Policy
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102 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 103
Component
Purpose and link to
strategy Operation Maximum opportunity Performance measures
EIP
To reward achievement of
the Group’s business plan,
key performance
indicators and the
personal contribution of
the Executive Directors.
Aligns the interests of
Executive Directors with
those of shareholders and
rewards long-term
stewardship of the
Company.
Delivery of a significant
proportion of the award in
shares with a performance
underpin and the ability to
apply malus adjustments
and clawback further
support longer-term
alignment with
shareholders’ interests.
The EIP is a combined annual and
long-term incentive plan under
which both annual awards and
deferred awards may be granted.
An annual award will usually be
satisfied in cash. Deferred awards
may be granted in the form of
conditional awards of shares or nil
(or nominal) cost options to
acquire shares.
Deferred awards may be settled, in
whole or in part, in cash or granted
as a right to receive a cash amount
calculated by reference to a
number of notional shares,
although, for Executive Directors,
the Committee would only do so
where the particular circumstances
made this the appropriate course of
action (for example where a
regulatory reason prevented the
delivery of shares).
Following the end of the
performance period, the
Committee will determine the
extent to which the performance
condition has been satisfied and
whether it is appropriate to adjust
the extent to which annual awards
and deferred awards will be
released to take account of
performance and / or any other
factors the Board considers
relevant.
An annual award will normally be
satisfied in cash following the
assessment of the performance
condition.
A deferred award will normally
vest (so that the participant is
entitled to acquire shares subject
to it) following the end of a
deferral period starting on the
date on which the performance
condition is assessed and ending
in the fourth year after the start of
the performance period.
Deferred awards will also be
subject to a holding period which
shall normally end in the fifth year
after the start of the performance
period.
During the holding period, the
participant may not normally deal
with shares acquired pursuant to
the deferred award other than to
satisfy a tax liability relating to the
award or with the permission of
the Committee.
An Executive Director may not
begranted awards under the EIP
in respect of any financial year
with a value in excess of 400%
ofbase salary.
For the purposes of this limit,
thevalue of shares subject to
adeferred award will normally
bebased on the five-day average
share price immediately preceding
the date of grant, unless the
Committee determines otherwise.
Ordinarily, the annual award may
not account for more than
one-third of the total value of the
EIP award (including both annual
and deferred awards) granted to an
Executive Director in respect of a
financial year.
Performance measures include
arange of financial and
non-financial factors to
encourage long-term value
creation for shareholders.
Awards will be assessed against
acombination of financial,
non-financial / strategic and
individual measures, usually
measured over a one-year period.
At least 50% of the EIP
opportunity is based on financial
and / or growth measures and / or
a relative performance measure.
Vesting will be determined between
0% and 100% depending upon the
Committee’s assessment of the
extent to which the performance
targets have been achieved.
Up to 25% of the maximum award
granted may vest at the end of the
performance period for delivering
a threshold level of performance.
Up to 50% of the maximum award
granted may vest at the end of the
performance period for delivering
appropriately stretching on-target
performance.
Deferred awards will be subject to
performance underpins linked to
the underlying performance of the
Group, risk management, conduct
and compliance over the deferral
period. The underpin performance
conditions applicable to a deferred
award will be disclosed in the
Directors’ Remuneration Report.
All-employee
share plans
The Buy As You Earn
(BAYE)scheme creates staff
alignment with the Group
and provides a sense of
ownership. Executive
Directors may participate
inthe BAYE scheme and /
or in any other all-
employee share plan that
may be introduced from
time totime.
The Executive Directors may
participate in all sections of
theBAYE scheme, being the
partnership and matching section
and the free share section.
Any other all-employee share plan
would be operated for Executive
Directors in accordance with its
rules and on the same basis as for
other qualifying employees.
The limits on participation under
the BAYE scheme will be those set
in accordance with the applicable
tax legislation from time to time.
The limit on participation and
other relevant terms of any other
all-employee share plan would be
determined in accordance with
the plan rules (and, where
relevant, applicable legislation)
and would be the same for the
Executive Directors as for other
relevant employees.
Not subject to performance
conditions in line with typical
market practice.
Dividend equivalents
For deferred awards granted under the EIP, additional shares may be delivered in respect of shares subject to deferred awards to reflect the
value of dividends paid during the deferral period. This payment may assume that dividends had been reinvested in shares on such basis as the
Committee determines.
Recovery provisions (malus and clawback)
Malus and clawback provisions may be applied in the event of:
• participation in or responsibility for conduct resulting in significant loss to a Group company;
• failure to meet appropriate standards of fairness and propriety including fraud, material dishonesty or material wrongdoing;
• bringing the Company into material disrepute or acting in a way which is materially adverse to a Group company;
• breaches of the employment contract that give potentially fair reason for dismissal;
• discovery of an event, post-cessation of employment, that would have prevented the vesting or grant of an award had the Company been
aware of the event;
• error in determining an award or assessing the performance condition;
• material misstatement in financial information that was taken into account when determining an award or assessing the performance condition;
• material failure of risk management;
• misbehaviour or material error on the part of the participant; and
• any Group company or a relevant business unit suffering a material downturn in its financial performance.
In the case of annual awards, malus and clawback provisions may be applied up to the fourth anniversary of the end of the performance period
and in the case of deferred awards up to the end of the holding period. If the relevant award has vested or been exercised, the clawed back
amount may be recovered from the recipient.
Explanation of performance metrics
Performance is measured against a balanced scorecard to support the Company’s strategy.
The targets are set by reference to strategic objectives.
Deferred awards are subject to performance underpins that are designed to protect shareholder value and which are aligned to appropriate
long-term behaviours including risk management, conduct and compliance. The Committee will consider the underlying performance of the
Group over the deferral period (which may be on a relative and / or absolute basis).
The Committee may vary or substitute any performance measure or underpin if it considers that it would be appropriate to do so (including taking
account of acquisitions or divestments, a change in strategy or a change in prevailing market conditions), provided that any such variation or
substitution is fair and reasonable and (at the discretion of the Committee) the change would not make the measure less demanding than the
original measure would have been when originally set. If the Committee were to make such a variation, an explanation would be given in the next
Directors’ Remuneration report.
Operation of share plans
The Committee may amend the terms of awards and options under the Company’s share plans in accordance with the plan rules in the event
of a variation of the Company’s share capital or a demerger, special dividend or other similar event or otherwise in accordance with the rules of
those plans. The Committee may operate any such plan in accordance with its rules.
Shareholding guidelines
To align the interests of the Executive Directors with those of shareholders, the Committee has adopted formal shareholding guidelines, which
apply both during and after employment. The Committee retains discretion to vary the application of the guidelines in appropriate circumstances.
During employment, Executive Directors are expected to retain all shares acquired through the EIP deferred awards (after sales to cover tax and
any exercise price) until such time as their holding has a value equal to the normal annual EIP award (being 400% of salary in the case of the
CEO and 350% of salary in the case of the CFO). Shares subject to EIP awards for which the performance conditions have been assessed but
have not vested (that is which are in a deferral period or a holding period) or which have vested but have not been exercised count towards the
guidelines on a net of assumed tax basis.
The Committee has also adopted a formal post-cessation shareholding requirement. This requires that for 24 months following cessation (or,
ifthe Committee so determines, following the date on which an Executive Director steps down from the Board), an Executive Director must
retain such of their ‘relevant’ shares as have a value (as at cessation) equal to their shareholding guideline. If the Executive Director holds less
than the required number of ‘relevant’ shares at any time they must retain the ‘relevant’ shares they hold.
Shares which the Executive Director has purchased, or which were held at the date of admission to the London Stock Exchange are not
‘relevant’ shares for these purposes.
Directors’ Remuneration report | Directors’ Remuneration Policy
Strategic report Governance Financial statements Other information
104 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 105
Policy for Non-Executive Directors
Purpose and link to strategy Operation Opportunity
To provide fees within a
market-competitive
range reflecting the
individual responsibilities
of the role and the
expected time
commitment.
To reimburse where
appropriate out-of-
pocket expenses which
are relevant to the
requirements of therole.
The fees of the Chair are determined by the
Committee and the fees of the Non-Executive
Directors are determined by the Board.
Non-Executive Directors are not eligible to participate
in any of the Company’s share plans, incentive
schemes or pension schemes.
Non-Executive Directors (including the Chair) may claim
expenses in line with the Company’s expenses policy for
out-of-pocket expenses incurred in the fulfilment of their
responsibilities. Reimbursed expenses may include a
gross-up to reflect any tax or social security due in
respect of the reimbursement.
The Chair and Non-Executive Directors may also be
eligible to receive benefits such as the use of secretarial
support, assistance with the preparation of tax returns, or
other benefits that may be appropriate in performance of
their duties.
Fees are set taking into account the responsibilities
of the role and expected time commitment.
Non-Executive Directors are paid a basic
feewithadditional fees paid for the chairing of
Committees. An additional fee is also paid for
therole of Senior Independent Director and
maybe paid for other responsibilities or
timecommitments.
Basic fees are subject to any limit set in accordance
with the Company’s articles of association or
otherwise approved by shareholders.
Where benefits are provided to Non-Executive
Directors they will be provided at a level
considered to be appropriate taking into
accountthe individual circumstances.
Policy for the remuneration of employees more generally
In line with our reward principles which apply throughout the Group we aim to:
• provide market-competitive base salaries and benefits which reflect the size and complexity of the business and the calibre and experience
of individuals in each role;
• provide a remuneration package that is competitive and which is appropriate to promote the long-term success of the Company;
• recognise and reward strong performance and individual contribution, with an appropriate proportion of package linked to financial and
non-financial performance; and
• enable executives and the wider workforce to share the growth in value of the Company through equity participation.
In respect of the Executive Directors, a greater proportion of the remuneration package is ‘at risk’ and determined by reference to
performanceconditions.
Illustrations of application of the Remuneration Policy
The following charts provide an illustration, for each of the CEO and CFO, of the application of the Policy in the year ending in September
2025. The charts show the split of remuneration between fixed pay (that is base salary, benefits, employer pension contributions / salary
supplement), EIP pay on the basis of minimum remuneration, remuneration receivable for performance in line with AJBell’s expectations
and maximum remuneration. No chart is prepared for the COO having regard to the fact that he will be retiring and stepping down as an
Executive Director of the Company on 31 December 2024.
Michael Summersgill
Illustrations of Remuneration Policy (m)
Minimum
performance
0.5
0
2.0
1.5
1.0
2.5
3.0
3.5
Performance
in line with
expectations
Maximum Maximum with
50% share
appreciation
Peter Birch
Illustrations of Remuneration Policy (m)
Minimum
performance
0.5
1.0
0
2.0
1.5
2.5
3.0
3.5
Performance
in line with
expectations
Maximum
Maximum with
50% share
appreciation
Base salary, benefits and pension
EIP – Annual Award
EIP – Deferred Award
100% 35% 21% 17%
22%
26% 21%
43%
53%
62%
£3,466,203
£2,744,870
£1,662,870
£580,870
100%
38%
23% 19%
21%
26%
20%
41%
51%
61%
£2,440,083
£1,944,250
£1,200,500
£456,750
In illustrating the potential reward, the following assumptions have been made.
Fixed pay:
Base salary (being the latest known salary as at 1 October 2024), a pension contribution of 7% of salary and benefits are disclosed in the single
figure table later in this Directors’ Remuneration report for the 2024 financial year.
Executive Incentive Plan:
Minimum performance No payout.
Performance in line with expectations
On-target vesting of the annual and deferred elements of the EIP based on an on-target
EIP award of 200% of salary for the CEO and 175% of salary for the CFO.
Maximum performance
Maximum vesting of the annual and deferred elements of the EIP based on a maximum
EIP award of 400% of salary for the CEO and 350% of salary for the CFO.
Maximum performance with share price
appreciation of 50%
Maximum vesting of the EIP with additional 50% share price growth appreciation on the
deferred award.
Recruitment remuneration policy
When recruiting a new Executive Director, the Committee will typically align the remuneration package with the elements of the Policy set out in
the previous pages.
When determining appropriate remuneration arrangements, the Committee may include other elements of pay which it considers are
appropriate. However, this discretion is capped and is subject to the limits referred to below.
Base salary will be set at a level appropriate to the role and the experience of the Executive Director being appointed. This may include
agreement on future increases up to market rate, in line with increased experience and / or responsibilities, subject to good performance,
where it is considered appropriate. Retirement benefits will be provided in line with the Policy.
The Committee will not offer non-performance related incentive payments (such as a ‘guaranteed sign-on bonus’, for example).
Other elements may be included in the following circumstances:
• an interim appointment being made to fill an Executive Director role on a short-term basis;
• if exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on a short-term basis;
• if an Executive Director is recruited at a time in the year when it would be inappropriate to provide an incentive for that year as there would
not be sufficient time to assess performance. Subject to the limit on variable remuneration set out below, the quantum in respect of the
months employed during the year may be transferred to the subsequent year so that reward is provided on a fair and appropriate basis;
• if a Director is required to relocate in order to take up the position, it is the Company’s policy to allow reasonable relocation, travel and
subsistence payments. Any such payments will be at the discretion of the Committee.
The Committee may also alter the performance measures, performance period, vesting period and holding period of the EIP, if the Committee
determines that the circumstances of the recruitment merit such alteration. The rationale will be clearly explained in the next Directors’
Remuneration report.
The maximum level of variable remuneration which may be granted (excluding ‘buyout’ awards as referred to below) is 400% of salary.
The Committee may make payments or awards in respect of hiring an employee to ‘buyout’ remuneration arrangements forfeited in connection
withleaving a previous employment or engagement. In doing so, the Committee will take account of relevant factors including any performance
conditions attached to the forfeited arrangements and the time over which they would have vested. The Committee will generally seek to structure
‘buyout’ awards or payments on a comparable basis to the remuneration arrangements forfeited. Any such payments or awards are excluded from
the maximum level of variable remuneration referred to in the Policy. ‘Buyout’ awards will ordinarily be granted on the basis that they are subject to
forfeiture or ‘clawback’ in the event of departure within 12 months of joining AJBell, although the Committee will retain discretion not to apply
forfeiture or clawback in appropriate circumstances.
Any share awards referred to in this section will be granted as far as possible under the EIP. If necessary, and subject to the limits referred to in
the Policy, recruitment awards may be granted outside of these plans as permitted under the Listing Rules which allow for the grant of awards
to facilitate, in unusual circumstances, the recruitment of an Executive Director.
Where a position is filled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be allowed to continue in
accordance with their terms.
Fees payable to a newly appointed Chair or Non-Executive Director will be in line with the Policy in place at the time of the appointment.
Policy on service contracts
Details of the Executive Directors’ service contracts and Non-Executive Directors’ letters of appointments are set out later in this Directors’
Remuneration report.
The Company’s current policy is for service agreements with Executive Directors to be capable of termination by either the Company or the
Executive Director by the giving of six-months’ notice, although the Committee retains discretion to set a notice period of up to 12 months.
Directors’ Remuneration report | Directors’ Remuneration Policy
Strategic report Governance Financial statements Other information
106 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 107
Policy on payments for loss of office
The following table summarises the Company’s policy on the determination of payments for loss of office by Executive Directors:
Provision Treatment
Fixed remuneration
Salary / fees, benefits and any retirement benefits provision will be paid to the date of termination.
Payments in lieu of notice
Where a payment in lieu of notice is made, this will include salary, benefits and any retirement benefits
provision until the end of the notice period that would otherwise have applied.
Alternatively, the Company may continue to provide the relevant benefits. Unless the Committee
determines otherwise, amounts will be paid in equal monthly instalments. Mitigation will usually apply.
Executive Incentive Plan
If an Executive Director leaves more than six months after the start of the performance period but
before the end of the performance period:
• as a consequence of death, ill health, injury, disability or for any other reason at the Committee’s
discretion (a ‘Good Leaver’), annual awards and deferred awards made in respect of that period will
usually be apportioned on a time basis and will usually vest at the normal vesting date to the extent
that the performance conditions and underpin conditions are satisfied. The Committee may reduce
or increase the extent to which an award vests to take account of the underlying financial
performance of the Company and other factors the Committee considers relevant and, in
compassionate circumstances, may release an award before its normal vesting date.
• other than as a Good Leaver, the award will lapse.
If an Executive Director leaves during the first six months of the performance period, that Award will
lapse unless they are a Good Leaver and the Committee decides that the Award may be retained on
the same basis as set out above.
If an Executive Director leaves after the end of the performance period but before the normal
vestingdate:
• as a Good Leaver, annual awards and deferred awards will usually vest at the normal vesting date to
the extent that the performance conditions and underpin conditions are satisfied. The Committee
may reduce or increase the extent to which an award vests to take account of the underlying
financial performance of the Company and other factors the Committee considers relevant and, in
compassionate circumstances, may release an award before its normal release date and assess any
underpin accordingly.
• other than as a Good Leaver, awards will only vest at the normal vesting date to the extent that the
performance conditions and underpin conditions are satisfied and only in respect of such
proportion of the award as determined by the Committee in its absolute discretion.
Other payments
The Committee reserves the right to make additional exit payments where such payments are made
ingood faith in discharge of an existing legal obligation (or by way of damages for breach of such
obligation) or by way of settlement or compromise of any claim arising in connection with the
termination of a Director’s office or employment. Payments may include, but are not limited to, the
amount of any fees for outplacement assistance and / or the Director’s legal and / or professional
advice fees in connection with their cessation of office or employment and payments in respect of
accrued but untaken holiday.
Where a ‘buyout’ or other award is made in connection with recruitment, the leaver provisions would
be determined at the time of the award.
Payments may be made under any all-employee share plan operated by the Company in line with the
rules of the plan which will apply to all participants and which, in the case of any tax-advantaged plan
such as the BAYE, will be subject to the requirements of the applicable tax legislation.
Change of control
In the event of a change of control during the performance period applying to an EIP award, the extent
to which the awards vest will be calculated by reference to the proportion of the performance period
that has elapsed and the extent to which the performance condition has been met or is expected to
be met. The Committee has the discretion to reduce or increase the extent to which an award vests to
take account of the underlying financial performance of the Company and any other factors the
Committee considers relevant.
In the event of a change of control after the end of the performance period, awards will become
capable of vesting (in respect of the proportion of the award determined by reference to the
satisfaction of the performance condition). Alternatively, the Committee may permit awards to be
exchanged for equivalent awards (which may be over shares in a different company, including the
acquiring company).
Awards under any all-employee share plan operated by the Company may vest in line with the rules
ofthe plan in the event of a change of control which will apply to all participants and which, in the
case of any tax-advantaged plan such as the BAYE, will be subject to the requirements of the
applicable tax legislation.
Non-Executive Directors are not entitled to compensation for termination of their appointment.
Consideration of employment conditions
elsewhere in the Group
The Committee is updated on a regular basis on the structure and
quantum of the all-employee remuneration framework, as well as
throughout the year being informed about the context, challenges
and opportunities relating to the remuneration of the wider
workforce to enable the Committee to consider the broader
employee context when making executive remuneration decisions.
The Committee spent considerable time in the second half of the
2024 financial year formulating this Policy. The Committee considers
the pay and employment conditions of all other employees when
setting and implementing the Policy and the level of salary increase
for the wider workforce is taken into account when determining any
salary increase for Executive Directors. Through our Employee Voice
Forum, we have engaged with staff on topics such as diversity and
inclusion, culture and pay and benefits. The Committee intends to
engage further with the workforce on this once the new Policy has
been approved by shareholders.
Consideration of shareholder views
The Remuneration Committee greatly values the continued dialogue
with shareholders and regularly engages with shareholders and
representative bodies to take their views into account when setting and
implementing the Company’s remuneration policies. The Company
engaged with shareholders and their proxy advisers on the proposed
new Policy. More detail on the engagement with shareholders in 2024
can be found in the annual statement by the Chair of the Remuneration
Committee earlier in this Directors’ Remuneration report.
Legacy remuneration arrangements
The Committee reserves the right to make any remuneration
payments and / or payments for loss of office (including exercising
any discretions available to it in connection with such payments)
notwithstanding that they are not in line with the policy set out in this
report where the terms of the payment were agreed:
• before the policy came into effect (provided that, in the case of
any payment agreed after the Company’s 2020 AGM, they are in
line with the policy in place at the time the terms were agreed or
were otherwise approved by shareholders); or
• at a time when the relevant individual was not a Director of the
Company and, in the opinion of the Committee, the payment was
not in consideration for the individual becoming a Director of the
Company; and
• to satisfy contractual commitments under legacy remuneration
arrangements.
For these purposes, ‘payments’ includes the Committee satisfying
awards of variable remuneration and, in relation to an incentive
award, the terms of the payment are ‘agreed’ at the time the award
isgranted.
Directors’ Remuneration report | Directors’ Remuneration Policy
Strategic report Governance Financial statements Other information
108 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 109
We have presented the Annual Report on Remuneration (the ‘Report’) to set out how the Policy of the Company has been applied in 2024
andhow the Committee intends to apply the proposed Policy going forward, subject to receiving shareholder approval at the 2025 AGM.
Anadvisory shareholder resolution to approve this report will be proposed at the AGM.
Reporting requirements
The Report reflects the reporting requirements on remuneration matters in accordance with the Companies Act 2006 and the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). The Report also meets the UK Listing
Authority’s Listing Rules and the Disclosure and Transparency Rules. The Report describes how the Board has complied with the provisions
setout in the UK Corporate Governance Code 2018 relating to remuneration matters.
Advice to the Committee
In relation to its consideration of Directors’ remuneration during the year, the Committee has received advice from:
• The Chair, Chief Executive Officer, Chief Financial Officer, HR Director and Company Secretary; and
• Deloitte LLP (‘Deloitte’).
Deloitte is retained to provide independent and objective advice to the Committee as required. Deloitte is a member of the Remuneration
Consultants Group and, as such, voluntarily operates under the Code of Conduct in relation to executive remuneration consulting in the UK.
Deloitte has provided advice covering annual remuneration report and policy disclosures, market practice and corporate governance updates.
Fees for providing remuneration advice to the Committee were £50,050 for the year ended 30 September 2024. The Committee assesses from
time to time whether this appointment remains appropriate or should be put out to tender and takes into account the Remuneration
Consultants Group Code of Conduct when considering this.
Committee evaluation
As indicated within the Corporate Governance report, an external evaluation of the Board and its Committees was undertaken during the year as
required by the UK Corporate Governance Code. The Committee reviewed the findings which confirmed the Committee continued to be
operating effectively.
Implementation of the Remuneration Policy for 2023/24
The following table sets out total remuneration for each Director in respect of the year ending 30 September 2024.
Total single figure remuneration (Audited)
Executive Incentive Plan (c)
£000
Year
Salary and
fees (a)
£ 000
Benefits
(b)
£ 000
Annual
award
Deferred
award
Pension (d)
£ 000
Total
remuneration
£ 000
Total fixed
remuneration
£ 000
Total variable
remuneration
£ 000
Executive Director
Michael Summersgill
2024 525 2 630 945 10
2,112 537 1,575
2023 500 2 173 261 5 941 507 434
Roger Stott
2024 306 2 297 445 10 1,060 318 742
2023 292 2 103 154 – 551 294 257
Peter Birch
2024 385 2 428 642 10 1,467 397 1,070
2023 310 8 129 194 9 650 327 323
Non-Executive Directors
Fiona Clutterbuck
(Appointed 1 May 2023)
2024 225 2–––
227 227 –
2023 94 –––– 94 94 –
Evelyn Bourke
2024 73 ––––
73 73 –
2023 63 –––– 63 63 –
Eamonn Flanagan
2024 80 – – – – 80 80 –
2023 63 –––– 63 63 –
Margaret Hassall
2024 78 ––––
78 78 –
2023 63 –––– 63 63 –
Fiona Fry
(Appointed 7 December 2023)
2024 62 –––– 62 62 –
2023––––– –––
Julie Chakraverty
(Appointed 1 June 2024)
2024 20 –––– 20 20 –
2023––––– –––
Les Platts
(Appointed 13 July 2023)
2024 60 ––––
60 60 –
2023 13 –––– 13 13 –
Simon Turner
(Stepped down 31 March 2024)
2024 42 ––––
42 42 –
2023 63 –––– 63 63 –
Directors’ Remuneration report | Annual Report on Remuneration
Main activities during the financial year
The Committee has an annual cycle of work to ensure that all responsibilities are met over a calendar year. The Committee met five times
during the year; the list below summarises the key items considered by the Committee during the year ended 30 September 2024.
For more information on the Committee’s Terms of Reference visit ajbell.co.uk.
Assessment of remuneration performance
• Review of financial and non-financial
performance ratings
• Review of CRO risk report
• Consideration of application of discretion
November
Wider workforce
• Update on FY23 wider workforce bonuses
• Review of CSOP and SMIP discretionary
awards
Directors’ Remuneration report
• Review of FY23 Directors’
Remunerationreport
Governance
• Update on shareholdings against
guidelines
• Market developments update
Assessment of remuneration performance
• EIP interim performance assessment
Wider workforce
• FY24 pay update – National Living
Wagechanges
April
Remuneration Policy
• Internal audit review of General
Remuneration Policy
Governance
• Market developments update
• FY23 AGM investor feedback
• Review of approach to Material
RiskTakersregulation
Specific remuneration arrangements
• Advised and D2C Senior Manager
remuneration packages
May
Wider workforce
• FY25 Group remuneration policy review
July
Specific remuneration arrangements
• FY25 Board, ExCo and Material
RiskTakersremuneration
• FY25 draft strategic objectives
Governance
• Annual Committee
effectivenessevaluation
• Annual review of Committee
meetingcycle
Remuneration Policy
• Proposed changes to EIP and Executive
Directors’ Remuneration Policy
September
• Shareholder engagement
Strategic report Governance Financial statements Other information
110 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 111
The figures in the single figure tables on the previous page are derived from the following:
(a) Salary and fees
The amount of salary / fees earned in respect of the year. A salary sacrifice pension arrangement is operated
by the Company. Directors’ salaries are shown gross of salary sacrifice pension contributions.
(b) Benefits
The benefits received by the Executive Directors comprise:
• amounts received for sacrificed annual leave; and
• private medical insurance.
(c) Executive
Incentive Plan
Annual award for FY24: the value of the annual award earned in respect of the financial year is based on the
share price at vesting of 460p. A description of performance against the measures which applied for the
financial year is provided on pages 113 and 114.
Deferred award for FY24: the value of the deferred award earned in respect of the financial year is based on
the share price at initial vesting of 460p. A description of performance against the measures which applied
for the financial year is provided on pages 113 and 114. Note: a deferred award will normally be released
following the end of a deferral period starting on the date on which the performance condition is assessed
and ending in the fourth year after the start of the performance period.
The values in the single figure of remuneration table are calculated in accordance with the applicable regulations
by reference to the share price at vesting. The values of the deferred awards are included in the FY24 table,
notwithstanding that the values will not be released to the Directors until the end of the deferral period.
EIP options are granted at the start of the performance period and therefore executives are exposed to the
impact of any subsequent movement in the share price over the performance period. In the period between
grant and vesting, the share price increased from 300p to 460p and is therefore attributable to a c. 53%
increase in the award values.
The values for the FY23 annual and deferred awards were based on the share price at vesting of 276.8p.
(d) Pension
Contributions made by AJBell to a defined contribution scheme or personal pension, excluding any pension
contributions made in respect of an individual under the Company’s salary sacrifice arrangement.
Base salary and fees
The Executive Directors’ base salaries with effect from 1 October 2024 are set out in the table below. The approach of the Committee in
determining these salaries is discussed in the annual statement by the Chair of the Remuneration Committee on page 100.
Base salary as
at 1 October
2024
Base salary as
at 1 October
2023 % Change
Michael Summersgill £541,000 £525,000 3%
Roger Stott
£315,257 £306,075 3%
Peter Birch £425,000 £385,000 10%
Non-Executive Directors receive fees reflecting the time commitment, demands and responsibilities of the role. Details of Chair and Non-
Executive Directors’ fees are detailed below.
As at 1
October Base fees
Additional
fees Total
Fiona Clutterbuck
2024 £231,750 –
£231,750
2023 £225,000 – £225,000
Evelyn Bourke
2024 £70,000 £15,000
£85,000
2023 £60,000 £12,500 £72,500
Eamonn Flanagan
2024 £70,000 £20,000
£90,000
2023 £60,000 £20,000 £80,000
Margaret Hassall
2024 £70,000 £17,500 £87,500
2023 £60,000 £17,500 £77,500
Fiona Fry
(Appointed 7 December 2023)
2024 £70,000 £25,000
£95,000
2023 N/A – N/A
Julie Chakraverty
(Appointed 1 June 2024)
2024 £70,000 –
£70,000
2023 N/A – N/A
Les Platts
2024 £70,000 –
£70,000
2023 £60,000 – £60,000
Simon Turner
(Stepped down 31 March 2024)
2024 N/A – N/A
2023 £60,000 £25,000 £85,000
Executive Incentive Plan (EIP)
For the financial year ended 30 September 2024, the maximum EIP awards granted to Michael Summersgill equated to 270% of base salary, and
250% of base salary for Roger Stott and Peter Birch.
Executive Director Maximum opportunity On-target opportunity Number of shares Face value at grant1 Performance period
2
Michael Summersgill 270% of salary 135% of salary 185,100 Annual
277,651 Deferred
£566,406
£849,612
Financial year ended
30 September 2024
Roger Stott 250% of salary 125% of salary 99,923 Annual
149,884 Deferred
£305,764
£458,645
Financial year ended
30 September 2024
Peter Birch 250% of salary 125% of salary 125,685 Annual
188,528 Deferred
£384,596
£576,896
Financial year ended
30 September 2024
1. For these purposes, the face value of the award is calculated by multiplying the number of shares over which the award was granted by 306p, the five-day average share price prior to
grant date.
2. Each award was subject to performance conditions assessed over the financial year ended 30 September 2024 (as described further below). Deferred awards are also subject to a
performance underpin for a further three years (to 30 September 2027).
The EIP awards are made up of an annual award and deferred award (40% and 60% of the total number of shares respectively) both granted as
nominal cost options. Both the annual and deferred awards are assessed against a balanced scorecard of financial and non-financial measures,
linked to the KPIs and strategy of the business, over the financial year ending 30 September 2024 as set out below:
Finance and Assurance (35%) Growth (15%) Our customers (15%) Our people (10%) Individual measures (25%)
Revenue
PBT
PBT margin
AUA inflows Customer retention rates
Customer experience
Staff engagement Including, but not limited
to Consumer Duty and
culture
The payout is 25% of maximum at threshold and 50% of maximum at on-target performance.
Finance and assurance
Threshold Target Stretch Maximum Actual
Revenue £218.2m £242.4m £266.6m £303.0m £269.4m
Profit before tax £84.2m £93.6m £103.0m £116.9m £113.3m
PBT margin 34.7% 38.6% 42.5% 48.3% 42.0%
Commentary on achievement: Strong growth of the business in FY24 helped to deliver record financial performance, with revenue and
profit before tax increasing 23% and 29% respectively, delivering outcomes between stretch and maximum.
PBT margin increased to 42.0% in the year, outperforming target. This increase is as a result of higher revenue margins combined with a
lower rate of cost growth as the business continues to drive cost efficiencies.
Performance outcome: 69% of maximum
Growth
Threshold Target Stretch Maximum Actual
Net AUA inflows (absolute) £4.3bn £4.7bn £5.2bn £5.9bn £6.1bn
Net AUA inflows (relative) 44.2% 49.1% 54.0% 61.3% 157.6%
Commentary on achievement: As a result of continued investment in AJBell’s platform propositions alongside improved retail investor
confidence, net AUA inflows reached an impressive £6.1 billion in the year, with net AUA inflows relative to competitors significantly
exceeding maximum.
Performance outcome: 100% of maximum
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112 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 113
Our customers
Threshold Target Stretch Maximum Actual
Combined AJBIC / AJBell customer % retention rate 94.0% 95.0% 96.0% 97.4% 94.2%
Customer experience – Trustpilot score 4.61 4.70 4.79 4.94 4.79
Commentary on achievement: Our platform customer retention rate remained high at 94.2%. The outturn exceeded the threshold, despite
being lower than the challenging target level of performance.
The strength of AJBell’s service was reflected in the market-leading Trustpilot score of 4.8, delivering stretch outcomes.
Performance outcome: 38% of maximum
Staff engagement
Threshold Target Stretch Maximum Actual
Great Place to Work survey score 58.5% 65.0% 71.5% 81.3% 83.0%
Commentary on achievement: The Committee noted a strong performance regarding staff engagement, exceeding maximum with a total
score of 83% in the Great Place to Work survey, placing AJBell amongst the best large companies in the country.
Notwithstanding the outcome outlined above, the Committee judged this as a stretch level of performance given that this is the first year
we have used the Great Place to Work survey. They considered the overall engagement levels in the business when determining the
outcome, and agreed they were strong, but concluded that the maximum award would only be given in exceptional circumstances.
Performance outcome: 75% of maximum
Strategic objectives
Director Objective
Michael Summersgill
Improve brand awareness The long-term investment in our brand delivered significant value during the year with
brand awareness in our core target market increasing from 37% at the start of the year to 56% in September 2024, an
excellent result for the period.
This growing brand awareness makes our acquisition marketing activity more effective and underpins our continued
business growth.
Embed Consumer Duty to a high standard and in line with regulatory deadlines The implementation of the new
Consumer Duty has been a notable regulatory change. We have successfully transitioned to the embedding phase,
where we assess, test, understand, and demonstrate the delivery of good customer outcomes; the effective use of
data forming a crucial foundation in how we measure and monitor the outcomes delivered to our customers.
Improve the pace of innovation and change The Committee is pleased to see improvements arising from the
continued investment in our change teams, software enhancements and increased use of cloud-based
technology, putting AJBell in an excellent position to accelerate the pace at which we can deliver
enhancements to the platform.
Payout: 87% of maximum
Director Objective
Roger Stott
Deliver business change effectively / Increase the pace of operational change Good progress has been
made during the year with further improvements in process automation and enhancements made to our data
governance framework. In addition, there has been a positive cultural shift in driving operational efficiency.
Deliver the COO succession plan Worked closely with Michael to ensure a robust succession plan is in
place ahead of Roger’s retirement later this year.
Payout: 50% of maximum
Director Objective
Peter Birch
Improve our long-term planning / Support business growth through financial controls The 2024 business
planning process (BPP) was significantly enhanced with clear five-year ambitions that aim to deliver for our key
stakeholder groups. These ambitions were underpinned by multi-year strategic objectives, which considered
the evolution of the platform market, regulation, customer behaviour and macroeconomic conditions.
Efficiently led the development of unit economics methodology to provide a more granular and insightful
assessment of the financial performance of our platform products to better inform decision making and
highlight the financial impact of key product-led decisions.
Successfully embedded an efficiency framework, which has enabled greater analysis of all functions and
the implementation of initiatives to drive further operational gearing.
Assume responsibility of the Treasury and HR functions The Committee is pleased with the smooth
transition of both functions under Pete’s leadership in the year.
Payout: 87% of maximum
In considering the extent to which the Executive Directors’ EIP awards vested, the Committee assessed achievement against the financial
andnon-financial targets, as well as the findings of the CRO risk report, in which no adverse findings were reported. They also considered
relevant external market conditions. The table below sets out the overall achievement for the vesting of the CEO, COO and CFO’s EIP awards.
The Committee considers that the level of payout is reflective of the overall performance of the Group in the year and is appropriate.
Vesting (as a %
ofmaximum) Granted
Vested and
released
Initially vested
and deferred Forfeited
CEO 74% Annual awards 185,100 137,160 – 47,940
Deferred awards 277,651 – 205,740 71,911
COO 65% Annual awards 99,923 64,551 – 35,372
Deferred awards 149,884 – 96,826 53,058
CFO 74% Annual awards 125,685 93,133 – 32,552
Deferred awards 188,528 – 139,700 48,828
The deferred awards are also subject to performance underpins for a further three years. The underpin conditions are set out below.
Underpin Measure Details
Grow shareholder value Measurement of the underlying
performance and strength of
theCompany.
No material deterioration in the underlying performance of the
Company which is significantly greater than any deterioration in the
performance of comparator listed financial services companies.
Risk, conduct and compliance Effective individual and Company
risk management.
No material failure in risk management, conduct or compliance.
The participants are entitled to acquire shares following the assessment of the underpins but (other than as regards sales to cover tax liabilities)
participants are required to hold acquired shares (and to not dispose of shares) for a further 12 months.
Payments made to former Directors during the year (Audited)
No payments were made to former Directors during the year.
Payments for loss of office during the year (Audited)
No payments for loss of office were made during the year.
Retirement arrangements for Roger Stott
As previously discussed, our COO Roger Stott will be retiring and stepping down as an Executive Director on 31 December 2024. Details of his
retirement arrangements are set out in the annual statement by the Chair of the Remuneration Committee on page 100.
Statement of Directors’ shareholding and share interests (Audited)
The interests of the Directors and their connected persons in the Company’s ordinary shares as at 30 September 2024 (or date of cessation)
were as follows:
Ordinary shares
EIP options vested
and unexercised
2
Total interests at
30September 2024
2
Executive Directors
Michael Summersgill 593,960 279,602
873,562
Roger Stott 204,363 140,362 344,725
Peter Birch 7,057 160,591 167,648
Non-Executive Directors
Fiona Clutterbuck 6,809 – 6,809
Evelyn Bourke 85,297 – 85,297
Eamonn Flanagan 151,090 – 151,090
Margaret Hassall –––
Fiona Fry –––
Julie Chakraverty 17,385 – 17,385
Les Platts 310,447 – 310,447
Simon Turner
1
185,953 – 185,953
1. Simon Turner stepped down from the Board on 31 March 2024. His shareholding is shown at this date.
2. Includes the number of shares from EIP options that are vested and unexercised, net of tax.
Since 30 September 2024 Roger Stott has acquired an additional 66 shares under the Companies’ BAYE plan, via the terms of an agreement
which was put in place before the year end. There has been no other subsequent change in Directors’ shareholdings and share interests.
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114 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 115
Executive Directors’ shareholding guidelines
The Committee has adopted a shareholding guideline for the Executive Directors, which requires a shareholding equivalent to 350% of base
salary for the Chief Executive Officer and 300% of base salary for other Executive Directors as further described in the Directors’ Remuneration
Policy. Michael Summersgill and Roger Stott have significantly exceeded this guideline at 30 September 2024, based on the share price at the
end of the financial year. Peter Birch was appointed as CFO during FY22 and has built up a shareholding of 196%, an increase of 118% in the year.
As set out in the Remuneration Policy, Executive Directors are expected to retain all shares acquired through the EIP deferred awards until the
shareholding guideline is met.
The Committee’s approach to post-cessation shareholding requirements is set out in the Directors’ Remuneration Policy approved at the 2024
AGM, and the proposed Directors’ Remuneration Policy on page 105.
Executive Directors’ interests under share schemes (Audited)
Awards under share plans:
Award date
As at
1October
2023
Granted
during the
year
Forfeited
during the
year
Exercised
during the
year
As at
30 September
2024 Status
Michael
Summersgill
Deferred award 12 Dec 19 39,983 – – 39,983
–
Vested and
exercised
Deferred award 10 Dec 20 36,163–––
36,163
Vested and
unexercised
Deferred award 9 Dec 21 54,293–––
54,293
Subject to
performance
underpins
Annual award 8 Dec 22 62,795 – – 62,795
–
Vested and
exercised
Deferred award 8 Dec 22 94,194–––
94,194
Subject to
performance
underpins
Annual award 15 Dec 23 – 185,100 47,940 –
137,160
Vested and
unexercised
Deferred award 15 Dec 23 – 277,651 71,911 –
205,740
Subject to
performance
underpins
Roger Stott Deferred award 10 Dec 20 6,151 – – 6,151
–
Vested and
exercised
Deferred award 9 Dec 21 47,740–––
47,740
Subject to
performance
underpins
Annual award 8 Dec 22 37,144 – – 37,144
–
Vested and
exercised
Deferred award 8 Dec 22 55,717–––
55,717
Subject to
performance
underpins
Annual award 15 Dec 23 – 99,923 35,372 –
64,551
Vested and
unexercised
Deferred award 15 Dec 23 – 149,884 53,058 –
96,826
Subject to
performance
underpins
Peter Birch Annual award 8 Dec 22 46,778 – – 46,778
–
Vested and
exercised
Deferred award 8 Dec 22 70,168–––
70,168
Subject to
performance
underpins
Annual award 15 Dec 23 – 125,685 32,552 –
93,133
Vested and
unexercised
Deferred award 15 Dec 23 – 188,528 48,828 –
139,700
Subject to
performance
underpins
Current service contracts and terms of engagement
Executive Directors
The Executive Directors are employed under service contracts that can be terminated by the Executive Director or the Company with six
months’ notice. The Directors’ service contracts are available for shareholder inspection at the Company’s registered office. These contracts
were dated as follows:
Contract date
Michael Summersgill 1 November 2019
Roger Stott 1 November 2019
Peter Birch 1 July 2022
Non-Executive Directors
The Non-Executive Directors do not have service agreements and are appointed subject to letters of appointment that can be terminated with
one month’s notice by either the Non-Executive Director or the Company. The letters of appointment are dated as follows:
Contract date
Fiona Clutterbuck 1 May 2023
Evelyn Bourke 1 July 2021
Eamonn Flanagan 22 March 2018
Margaret Hassall 1 September 2021
Fiona Fry 7 December 2023
Julie Chakraverty 1 June 2024
Les Platts 13 July 2023
Simon Turner
1
1 July 2014
1. Simon Turner stepped down from the Board on 31 March 2024.
Performance graph and historical Chief Executive Officer remuneration outcomes
The graph below shows the TSR performance of the Company’s shares in comparison to the FTSE 250 for the period from the date of admission,
12 December 2018 to 30 September 2024. The TSR performance of the FTSE 250 index has been selected as it is considered the most appropriate
comparator group to AJBell. For the purposes of the graph, TSR has been calculated as the percentage change during the period in the market
price of the shares, assuming that dividends are reinvested in shares on the ex-dividend date. The graph shows the change in value, up to October
2024, of £100 invested in shares in the Company on the date of admission compared with the change in value of £100 invested in the FTSE 250.
50
0
150
100
200
250
300
Total shareholder return for AJ Bell against the FTSE 250 index
AJ Bell
Total Shareholder Return (rebased to 100)
FTSE 250
Dec 18
Mar 19
Jun 19
Sep 19
Dec 19
Mar 20
Jun 20
Sep 20
Dec 20
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Mar 23
Jun 23
Sep 23
Mar 24
Dec 23
Jun 24
Sep 24
Dec 22
Jun 21
Mar 21
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116 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 117
CEO pay remuneration
The table below shows details of the total remuneration and EIP vesting (as a percentage of the maximum opportunity) for the
ChiefExecutiveOfficer.
Total single
figure
remuneration
£’000
Annual EIP
award (% of
maximum
opportunity)
Deferred EIP
award (% of
maximum
opportunity)
2024 2,112 74% 74%
2023 941 59% 59%
2022 1,110 67% 67%
2021 1,191 79% 79%
2020 1,297 79% 79%
2019 1,906 65% 65%
Directors’ remuneration ratios and percentage change
The table below sets out in relation to salary / fees, taxable benefits and incentives, the percentage change in pay for the Directors compared to
the wider workforce from 2020 to 2024. The annual change in salary is based on the salary of employees (on a full-time-equivalent basis) at the
end of each financial year, and the annual change in bonus excludes employees that are not eligible for a bonus. The average employee change
has been calculated by reference to the mean change.
Julie Chakraverty and Fiona Fry were appointed during the year to 30 September 2024 and accordingly, have been excluded from the table
below. Simon Turner stepped down from the Board on 31 March 2024, and has therefore also been excluded from the table below.
2024 2023 2022 2021 2020
Salary/
Fees Benefits
Annual
bonus
Salary/
Fees Benefits
Annual
bonus
Salary/
Fees Benefits
Annual
bonus
Salary/
Fees Benefits
Annual
bonus
Salary/
Fees Benefits
Annual
bonus
Michael Summersgill 5.0% 35.6%
2
262.6%
3
59.9% 55.3% 35.4% 27.9% (3.5%) 20.9% 0.0% 13.4% (17.7%) 2.5% (87.5%) (44.4%)
Roger Stott
5.0% 35.6%
2
188.5%
3
6.0% 0.0% (8.9%) n/a n/a n/a n/a n/a n/a n/a n/a n/a
Peter Birch
24.2% (70.5)%
4
230.5%
3
0.0% 571.3% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Fiona Clutterbuck
1
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 n/a n/a
Evelyn Bourke
15.1% n/a n/a 11.2% n/a n/a 11.8% n/a n/a n/a n/a n/a n/a n/a n/a
Eamonn Flanagan
27.0% n/a n/a 5.0% n/a n/a 11.7% n/a n/a 13.2% n/a n/a 2.2% n/a n/a
Margaret Hassall
23.0% n/a n/a 11.2% n/a n/a 11.8% n/a n/a n/a n/a n/a n/a n/a n/a
Les Platts
1
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 n/a n/a
Wider workforce
8.9% 116.2%
5
49.0%
6
11.7% 1,385.6% 7.5% 9.9% 6.9% 13.5% 3.3% 28.0% 11.1% 4.9% (56.0%) (8.3%)
1. Fiona Clutterbuck and Les Platts’ salaries have been annualised for comparative purposes.
2. The increase in benefits in the year is due to the provision of private medical insurance in the year.
3. The increase in the annual bonus for the Executive Directors is based on the awards granted under the EIP which are subject to share price movements. For the FY24 awards, the share
price increased from 300p to 460p.
4. The reduction in benefits for Peter Birch is due to amounts received in FY23 for sacrificed annual leave.
5. The increase in benefits for the wider workforce is due to the grant of free shares in January 2024.
6. The increase in the annual bonus for the wider workforce includes awards granted under employee share schemes which are subject to share price movements. For the FY24 awards,
the price increased from 300p to 460p.
CEO pay ratio
The table below sets out the ratio at median (50
th
percentile), 25
th
and 75
th
quartile of the total remuneration received by the CEO compared
with the total remuneration received by employees (calculated on a full-time-equivalent basis). The ratios have been calculated in accordance
with the Companies (Miscellaneous Reporting) Requirements 2018 (the ‘Regulations’).
Year Pay element Method
25
th
(Lower
quartile)
50
th
(Median)
75
th
(Upper
quartile)
2024 Salary Option A 21:1 17:1 10:1
Total remuneration Option A 73:1 57:1 33:1
2023 Salary Option A 21:1 17:1 10:1
Total remuneration Option A 35:1 28:1 16:1
2022 Salary Option A 22:1 19:1 11:1
Total remuneration Option A 46:1 37:1 21:1
2021 Salary Option A 23:1 19:1 12:1
Total remuneration Option A 52:1 42:1 25:1
2020 Salary Option A 24:1 19:1 12:1
Total remuneration Option A 59:1 47:1 29:1
The remuneration figures used to calculate the CEO pay ratio are provided below:
Year Pay element CEO
25
th
(Lower
quartile)
50
th
(Median)
75
th
(Upper
quartile)
2024 Salary £525,000 £25,078 £31,164 £53,499
Total remuneration £2,112,000 £28,923 £37,383 £64,092
2023 Salary £500,000 £23,984 £28,948 £50,880
Total remuneration £941,203 £26,558 £33,430 £58,796
2022 Salary £498,613 £22,171 £26,449 £44,964
Total remuneration £1,109,710 £24,331 £30,052 £51,731
2021 Salary £481,752 £21,188 £25,272 £40,716
Total remuneration £1,190,522 £22,823 £28,380 £46,996
2020 Salary £481,752 £20,349 £25,008 £38,568
Total remuneration £1,297,056 £22,026 £27,511 £44,197
The calculation methodology used to identify the employees at each quartile between 2020 and 2024 is Option A, as defined in the regulations.
We believe this is the most robust and accurate approach, and in line with shareholder expectations. The median, 25
th
and 75
th
percentile
colleagues were determined based on calculating total annual remuneration up to and including 30 September. Total full-time-equivalent
remuneration for employees reflects all pay and benefits received by an individual in respect of the relevant year and has been calculated in line
with the methodology for the single figure of remuneration for the CEO, shown on page 111. Only employees that were employed at the end of
the financial year were included. Annual bonuses of employees are based on the expected pay-out. The reason for this is that the annual bonus
results had not been paid at the time of preparing the ratio calculations. The workforce comparison is based on the payroll data for the financial
year for all employees (including the CEO but excluding Non-Executive Directors).
A significant proportion of the CEO’s pay is in the form of variable pay through the EIP scheme. CEO pay will therefore vary year-on-year based on
Company and share price performance. The CEO to all-employee pay ratio will therefore also fluctuate taking this into account. The increase in
total remuneration ratio reflects in the increase in the CEO’s EIP opportunity in 2024 as well as the strong performance.
The Committee believes that the median pay is consistent with the pay, reward and progression policies for the UK employee population, and is
appropriate for the Company’s size and structure.
Distribution statement
The following table sets out the total remuneration for all employees and the total shareholder distributions:
2024
£’000
2023
£’000 % change
Total remuneration for all employees1 80,340 64,758 24%
Dividends and share buybacks2 47,416 35,294 34%
1. Total remuneration for all employees represents the underlying staff cost for the Group.
2. See note 11 in the consolidated financial statements.
Statement of voting at the AGM
Votes cast by proxy and at the meeting at the AGM held on 30 January 2024 in respect of the Directors’ Remuneration Report, and at the AGM
on 8 February 2023 in respect of the Directors’ Remuneration Policy, were as follows:
Resolution
Votes for
including
discretionary
votes
%
for Votes against
%
against
Total votes
cast excluding
votes withheld
Votes
withheld
Total votes
cast including
votes withheld
Approve Directors’ Remuneration Report 327,282,166 96.13 13,165,554 3.87 340,447,720 9,436,529 349,884,249
Approve Directors’ Remuneration Policy 335,054,935 98.14 6,337,734 1.86 341,392,669 1,276,097 342,668,766
Approval
This report was approved by the Board on 4 December 2024 and signed on its behalf by:
Margaret Hassall
Chair of the Remuneration Committee
4 December 2024
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118 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 119
The Directors present their Annual Report on the affairs of the Group,
together with the consolidated financial statements and Auditor’s
report, for the year ended 30 September 2024. The Directors’ report
comprises pages 120 to 122 of this report, together with sections of
the Annual Report incorporated by reference below.
Additional disclosures
The Strategic report is a requirement of the UK Companies Act 2006
and can be found on pages 1 to 67 of this Annual Report.
The Company has chosen, in accordance with section 414C (11) of
the Companies Act 2006, to include details of the following matters
in its Strategic report that would otherwise be disclosed in the
Directors’ report:
Detail Page(s)
Likely future developments in the business 9
Research and development 56
Greenhouse gas emissions 42 to 52
Non-financial reporting 53
Corporate governance
The Corporate Governance report, including the statement as to the
Company’s compliance with the UK Corporate Governance Code
(the ‘Code’) and details of where the Code is publicly available, is set
out on pages 74 to 83. The information in that section is incorporated
into this Directors’ report by reference and is deemed to form part of
this report, fulfilling the requirements of the corporate governance
statement for the purposes of Disclosure Guidance and Transparency
Rules (DTR) 7.2.1.
The Strategic report and the Directors’ report together form the
Management report for the purposes of the DTR 4.1.8R.
Information required to be disclosed under Listing Rule 6.6.1, which is
not included in the Directors’ report, can be located as follows:
Listing Rule 6.6.1
RequiredDisclosure Location in the Annual Report and Accounts
(12) Current year
dividend waiver
agreements
Note 11 to the consolidated financial
statements provides information on
employee benefit trusts that have
waived dividends.
(13) Future dividend
waiver agreements
Note 11 to the consolidated financial
statements provides information on
employee benefit trusts that have
waived dividends.
Principal activity
AJ Bell plc (the ‘Company’) and its subsidiaries (together the ‘Group’)
provide an investment platform operating in the advised and D2C
markets. The Company is registered as a public limited company
under the Companies Act 2006 and is listed on the Main Market of
the London Stock Exchange.
Results and future performance
A review of the Group’s results and activities is covered within the
Strategic report on pages 1 to 67. This incorporates the Chair’s
statement and Chief Executive Officer’s review, which include an
indication of likely future developments.
Share capital
Details of the Company’s issued share capital, together with details
ofthe movements therein, are set out in note 23 to the consolidated
financial statements. This includes the rights and obligations
attaching to shares and restrictions on the transfer of shares.
The Company has one class of ordinary share which carries no right
to fixed income. There are no specific restrictions on the size of the
holding nor on the transfer of shares, which are both governed by the
general provisions of the Articles and prevailing legislation.
The Directors are not aware of any agreements between holders of
the Company’s shares that may result in restrictions on the transfer
ofsecurities or on voting rights.
Employee benefit trusts have been established in order to provide
benefits for the Group’s employees and former employees. This
includes acting as a vehicle for the acquisition and holding of a pool
of shares to satisfy share awards under the Company’s employee
share plans. During the year, 392,615 options under the Executive
Incentive Plan (EIP) were exercised and issued from the trusts as
discussed in note 23.
Authority to purchase its own shares
The Company is permitted pursuant to the terms of its Articles
topurchase its own shares subject to shareholder approval.
TheCompany was granted authority at the 2024 AGM to purchase
itsown shares up to an aggregate value of 10% of the issued nominal
capital. No shares were purchased under this authority in the year to
30September 2024 and up to the date of this report. The authority will
expire on the earlier of the end of the next AGM and 28 February 2025.
Substantial shareholdings
Information provided to the Company by substantial shareholders
(holding voting rights of 3% or more in the financial instruments
oftheCompany) pursuant to the DTRs are published via a Regulatory
Information Service and are available on the Company’s website.
Asat30 September 2024, the following information has been received
inaccordance with DTR 5 from holders of notifiable interests in the
Company’s issued share capital. It should be noted some of these
holdings may have changed since the Company received the
notification. Holders are not required to notify the Company
ofanychange until this, or the next applicable threshold is
reachedorcrossed.
Interested party
Number of
shares
% of share
capital
1
Andy Bell 77,305,271 18.716
Liontrust Investment Partners LLP 41,542,459 10.057
Between 30 September 2024 and 4 December 2024 (the latest
practicable date for inclusion in this report), the Company received
no notifications pursuant to DTR 5.
1. The percentage of voting rights detailed above was calculated at the time of the
relevant disclosures made in accordance with Rule 5 of the DTRs.
Key performance indicators
Key performance indicators in relation to the Group’s activities are
continually reviewed by senior management and are presented on
pages 22 and 23.
Dividends
The Board recommends a final dividend of 8.25p per ordinary
sharefor the year ended 30 September 2024. This, together with the
interim dividend of 4.25 pence per ordinary share paid on 28 June
2024, makes a total dividend in respect of the financial year ended
30September 2024 of 12.50p per ordinary share. The final dividend
proposed by the Directors will be subject to approval at the AGM on
29 January 2025. If approved, the Company will pay a final dividend
on 7 February 2025 to shareholders on the register at 10 January
2025. The ex-dividend date will be 9 January 2025.
The employee benefit trusts have elected to waive all dividends on
shares held under the trusts relating to AJBell plc. Further details can
be found in note 11 to the consolidated financial statements.
Articles of Association
The Articles of Association of the Company (the ‘Articles’)
wereadopted by special resolution on 15 November 2018. Any
amendments to the Articles may be made in accordance with the
provisions of the Companies Act 2006, by way of a special resolution
at a general meeting of shareholders.
Directors
The Directors of the Group who were in office during the year are
disclosed on pages 72 and 73.
Under the Articles, all of the Directors are required to retire from the
Board at the AGM. Accordingly, each of the Directors, being eligible,
will offer themselves for re-election by the members of the Company.
The service agreements of current Executive Directors and the letters
of appointment of the Non-Executive Directors are available for
inspection at the Company’s registered office.
Directors’ powers
Subject to company law and the Company’s Articles, the Directors
may exercise all of the powers of the Company and may delegate
their power and discretion to committees. The ExCo is responsible
for the day-to-day management of the Group. The Articles give the
Directors power to appoint and replace Directors.
Directors’ interests
Directors’ interests in the shares of AJBell plc are disclosed in the
Directors’ Remuneration report on page 115.
During the period covered by this report, no Director had any
material interest in a contract to which the Company or any of its
subsidiary undertakings was a party (other than their own service
contract) that requires disclosure under the requirements of the
Companies Act 2006.
Directors’ indemnities
The Company has made qualifying third-party indemnity provisions for
the benefit of its Directors. These provisions were for the purposes of
section 234 of the Companies Act 2006 and were in force throughout
the financial year and remain so at the date of this report.
Change of control
There are no significant agreements to which the Company is a
partythat take effect, alter or terminate on a change of control of
theCompany following a takeover bid. There are no agreements
between the Company and its Directors or employees providing for
compensation for loss of office or employment that occurs because
of a takeover bid.
However, options and awards granted to employees under the
Company’s share schemes and plans may vest on a takeover, under
the schemes’ provisions.
Financial instruments and risk management
The risk management objectives and policies of the Group are set out
within note 25 of the consolidated financial statements.
Political contributions
No political contributions were made by the Group during the year
(2023: £nil).
Corporate social responsibility
Information about the Group’s approach to the environment,
including details of our greenhouse gas emissions, is set out on pages
42 to 52 of the Strategic report.
Disabled employees
We welcome applications from people with disabilities and we make
reasonable adjustments to the recruitment and selection process for
those who are interested in working for the Group. In the event of
employees becoming disabled, every effort is made to ensure that
their employment with the Group continues and that the appropriate
facilities and training are arranged. It is the policy of the Group that
the training, career development and promotion of disabled persons
must, as far as possible, be the same as that of other employees.
Engagement with employees
The Group places considerable value on the involvement of its
employees and has continued to keep them informed on matters
affecting them as employees and on the various other factors
affecting the performance of the Group. This is achieved through
formal and informal meetings and internal publications. Employee
representatives are consulted regularly on a wide range of matters
affecting their current and future interests via AJBell’s Employee
Voice Forum which is chaired by Fiona Clutterbuck. Employee share
schemes have operated since June 2005. These schemes have
promoted wider employee involvement in the Group and include our
annual free share award scheme. Further information on employee
engagement is set out on pages 34 to 38 of the Strategic report.
The Directors believe that the incentivisation of senior management
and key employees by equity participation is an important factor in
the continuing success of the Group. This policy aligns the interests
of management and the wider workforce with those of the
shareholder base.
Directors’ report
Strategic report Governance Financial statements Other information
120 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 121
Engagement with suppliers, customers and
other stakeholders
Details of how the Group engages with its key stakeholders, including its
shareholders, can be found on pages 24 and 25 of the Strategic report.
Details of how interests of stakeholders are considered in the Board’s
decision making can be found in the Section 172 statement on pages
26 and 27.
Internal control
The Board has overall responsibility for the maintenance of the
internal control system established by the Group and places
considerable reliance on a strong control environment. However,
such a system is designed to manage rather than eliminate the risk of
failure to achieve business objectives. It can only provide reasonable
and not absolute assurance against material misstatement or loss.
Compliance with internal control procedures is monitored by the
Directors through the Risk & Compliance Committee and the Audit
Committee, which are responsible for overseeing the Group’s risk
management, compliance and internal audit functions. Details of the
Group’s risk management can be found on pages 58 to 60.
Going concern and viability statement
The consolidated financial statements have been prepared on a
going concern basis. After making enquiries and considering the
Group’s financial position, its business model, strategy, financial
forecasts and regulatory capital together with its principal risks and
uncertainties, the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities
asthey fall due for at least 12 months from the date of signing this
report. The going concern basis of preparation is discussed within
note 2.1 to the consolidated financial statements.
In accordance with provision 31 of the UK Corporate Governance
Code, the Directors have assessed the prospects of the Group over
alonger period than the 12 months required by the going concern
provision. Details of the assessment can be found on page 67.
Events after reporting date
Details of significant events since the reporting date are contained in
note 29 to the consolidated financial statements.
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with UK-adopted International
Accounting Standards and applicable law and regulations.
Company law requires the Directors to prepare Group and Parent
Company financial statements for each financial year. Under that law
the Directors are required to prepare the Group financial statements
in accordance with UK-adopted International Accounting Standards
and have elected to prepare the Parent Company financial
statements in accordance with UK accounting standards and
applicable law including FRS 101 Reduced Disclosure Framework.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and Parent Company and of the profit
or loss for the Group for that period. The Directors are also required to
prepare the Group financial statements in accordance with
International Financial Reporting Standards as adopted by the UK.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
• for the Group financial statements, state whether they have been
prepared in accordance with UK-adopted International
Accounting Standards, subject to any material departures
disclosed and explained in the financial statements;
• for the Parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group or Parent
Company will continue in business; and
• prepare a Directors’ report, a Strategic report and Directors’
Remuneration report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Parent Company and enable them to ensure
that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for ensuring the Annual Report and
theFinancial Statements are made available on a website. Financial
statements are published on the Company’s website in accordance
with legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial
statements contained therein.
Disclosure of information to auditor
Each of the persons who is a Director at the date of approval of this
Annual Report confirms that:
• so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• the Director has taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Company’s auditor is
aware of that information.
This confirmation is given pursuant to section 418 of the Companies
Act 2006 and should be interpreted in accordance with, and subject
to, those provisions.
Annual General Meeting
The AGM will be held at 12 noon on 29 January 2025 and will be held
as a physical meeting as detailed in the Corporate Governance report
on page 83. Details of the resolutions to be proposed at the AGM are
set out in the separate circular which has been sent to all shareholders
and is available on the AJBell website at ajbell.co.uk/group/investor-
relations/agm.
Approved by the Board on 4 December 2024 and signed on its
behalfby:
Kina Sinclair
Company Secretary
4 Exchange Quay
Salford Quays
Manchester
M5 3EE
Each of the Directors, whose names and responsibilities are listed
inthe Corporate Governance report, confirms that, to the best of
their knowledge:
• the financial statements have been prepared in accordance with
the applicable set of accounting standards and give a true and fair
view of the assets, liabilities, financial position and profit and loss
of the Group; and
• the Annual Report includes a fair review of the development and
performance of the business and the financial position of the
Group and Parent Company, together with a description of the
principal risks and uncertainties that they face.
We consider that the Annual Report and Accounts, taken as a whole,
are fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
Approved by the Board on 4 December 2024 and signed on its
behalfby:
Kina Sinclair
Company Secretary
4 Exchange Quay
Salford Quays
Manchester
M5 3EE
Directors’ report Statement of Directors’ responsibilities
Strategic report Governance Financial statements Other information
122 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 123
AssuredUncertain
We help our customers take control of their
financial futures and achieve their long-term
financial goals. AJ Bell is a brand our customers
know and trust, through our first-class customer
service that supports our range of products
andservices that our customers and advisers
canrelyon.
There is a great team at AJBell. I always
find them helpful with any questions
and more than happy trusting them
with holding my investments. Easy to
use app and cheap dealing charges.”
Mr P Steele
AJ Bell customer
Making investing easy
AJ Bell plc Annual Report and Accounts 2024 125
Strategic report Governance
Financial statements
Other information
124 AJ Bell plc Annual Report and Accounts 2024
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 30 September
2024 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
• the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We have audited the financial statements of AJBell Plc (the ‘Parent
Company’) and its subsidiaries (the ‘Group’) for the year ended
30September 2024 which comprise the consolidated income
statement, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated
statement of cash flows, the notes to the consolidated financial
statements including a summary of material accounting policy
information, the company statement of financial position, the company
statement of changes in equity and notes to the company financial
statements, including a summary of material accounting policy
information.
The financial reporting framework that has been applied in their
preparation is applicable law and UK adopted international
accounting standards and as regards the Parent Company financial
statements, applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101 Reduced
Disclosure Framework (United Kingdom Generally Accepted
Accounting Practice), as applied in accordance with the provisions of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion. Our audit
opinion is consistent with the additional report to the Audit
Committee.
Independence
Following the recommendation of the Audit Committee, we were
appointed by the Board of Directors in June 2019 to audit the
financial statements for the year ended 30 September 2020 and
subsequent financial periods. The period of total uninterrupted
engagement is 5 years, covering the years ended 30 September 2020
to 30 September 2024. We remain independent of the Group and the
Parent Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance
with these requirements. The non-audit services prohibited by that
standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
theDirectors’ use of the going concern basis of accounting
inthepreparation of the financial statements is appropriate.
Ourevaluation ofthe Directors’ assessment of the Group and
theParent Company’s ability to continue to adopt the going
concernbasis of accounting included:
• Review of the prior year forecasts prepared by management
compared to current year actuals and consider the reason for
variations and assess the accuracy of management’s budgets and
forecasts;
• Review of the current year forecasts prepared by management
and challenge the key inputs and assumptions such as customer
growth rate and retention included therein based on our
knowledge of the business and understanding of the risks arising
from the current economic environment; and
• Understanding and review of the Group’s stress testing of liquidity
and regulatory capital, including challenging rationale behind the
severity of the stress scenarios that were used based on our
understanding of the wider economic environment in which the
business is operating.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group and the Parent
Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorisedfor issue.
In relation to the Parent Company’s reporting on how it has applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in the
financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
thisreport.
Overview
Coverage
97% (2023: 97%) of Group revenue
97% (2023: 96%) of Group profit before tax
92% (2023: 94%) of Group total assets
In the prior year, the previously reported 100 % coverage denoted the
portion of the group audited. However, the figures reported above for the
current and prior year denotes work done based on significant components
as a % of the Group.
2024 2023
Key audit matters
Fraud risk in revenue recognition
Materiality
Group financial statements as a whole
£5.9m (2023:£4.4m) based on 5% (2023: 5%) of Profit before tax.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
We determined there to be four significant components which are based in the United Kingdom. We determined these significant components
to be the Parent Company, AJBell Securities Limited, AJBell Management Limited and AJBell Business Solutions Services Limited. We carry
out full scope audits of all significant components as well as non-significant components in the Group as they require audits for statutory
purposes.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements included:
• Enquiries and challenge of management and the Board to understand the actions they have taken to identify climate-related risks and their
potential impacts on the financial statements and adequately disclose climate-related risks within the annual report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects this
particular sector; and
• Review of the minutes of Board and Audit Committee meeting and other papers related to climate change and performed a risk assessment
as to how it may affect the financial statements and our audit.
We also assessed the consistency of management’s disclosures included as Other Information with the financial statements and with our
knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by climate-related risks.
Independent auditor’s report to the members of AJ Bell plc
Strategic report Governance Financial statements Other information
126 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 127
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Risk of fraud in revenue
recognition in respect of
custody fees, interest
payaway to customers and
accrued interest income
(Note 2.3 and 5)
Revenue is the most significant item
in the consolidated income
statement and represents one of the
areas that had the greatest effect on
the overall Group audit.
At the outset of the audit, we
performed a detailed risk assessment
considering the presumed fraud risk
over revenue. This assessment was
revisited throughout the audit.
We concluded that there is an
incentive to overstate revenue given
the external focus on the Group’s
results and management incentive
schemes which are, in part,
dependent on reported profits. We
concluded the areas most open to
manipulation are:
Custody fees
There is a risk that the revenue is
misstated through manipulating the
price of the client’s assets used in the
calculation.
There is a risk that the revenue is
misstated through manipulating the
fee rate used in the calculation.
Interest payaway to customers
Revenue includes retained interest
income, which is a function of
interest income reduced by interest
payaway to customers.
There is a risk that the revenue is
being misstated through
manipulating the interest rate used in
the calculation of interest pay-away
to customers.
Accrued interest income
There is a risk that the revenue is
being misstated through manipulating
the interest rate used in the manual
calculation of accrued interest
income.
Based on this, the fraud risk associated
with these specific revenue streams are
deemed to be a key audit matter.
The specific procedures we performed were as follows:
We performed an evaluation of the design and implementation of key
controls.
We used our data analytics software to reperform the calculation of key
income streams on a customer-by-customer basis, including custody
income and interest pay-away to customers, using source data extracted
from records held by the group. We then compared our independent
recalculations to the amounts reported. For the inputs noted as key audit
matters, we then performed the below procedures over the data used in
the recalculation.
Custody fees
We agreed a sample of price of assets used in our recalculation above to
third party sources.
We agreed a sample of fee rates used in our recalculation above to the fee
rate card as available to the public in the Group’s website as specified in the
agreements with customers. For special rates (i.e. those not on the standard
rate card), we have agreed a sample to signed agreements or fee letters
supporting the special rates.
Interest payaway to customers
We agreed a sample of interest rates in our recalculation above to the
interest rate card as available to the public in the Group’s website as
specified in the agreements with customers.
Accrued interest income
We agreed a sample of interest rates from the interest income calculation
spreadsheet to the interest rate per the deposit notice from counterparties.
Key observations
Based on our work performed, revenue appears to be reasonable.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
asfollows:
Group financial statements Parent company financial statements
2024
£m
2023
£m
2024
£m
2023
£m
Materiality
5.9 4.4 1.5 0.9
Basis for determining
materiality
5% of profit before tax on
ordinary activities before
taxation.
5% of profit before tax on
ordinary activities before
taxation.
1.5% of total assets of
the parent company.
1.5% of total assets of the
parent company.
Rationale for the
benchmark applied
Profit on ordinary
activities before taxation
attributable to
shareholders has been
used as we consider this
to be the most significant
determinant of the
Group’s financial
performance used by
shareholders and other
users of the financial
statements.
Profit on ordinary
activities before taxation
attributable to
shareholders has been
used as we consider this
to be the most significant
determinant of the
Group’s financial
performance used by
shareholders and other
users of the financial
statements.
Total assets is
considered the most
relevant metric to the
users of the financial
statements given that
the company is parent
entity of the group and
does not earn any
income other than
dividends from
subsidiary entities.
Total assets is considered
the most relevant metric
to the users of the
financial statements
given that the company is
parent entity of the group
and does not earn any
income other than
dividends from subsidiary
entities.
Performance materiality
4.4 3.3 1.1 0.7
Basis for determining
performance materiality
Performance materiality
was calculated using 75%
of overall materiality.
Performance materiality
was calculated using 75%
of overall materiality.
Performance materiality
was calculated using 75%
of overall materiality.
Performance materiality
was calculated using 75%
of overall materiality.
Rationale for the
percentage applied for
performance materiality
This was based on our
risk assessment
procedures and the
expectation of a low level
of misstatements.
This was based on our
risk assessment
procedures and the
expectation of a low level
of misstatements.
This was based on our
risk assessment
procedures and the
expectation of a low level
of misstatements.
This was based on our
risk assessment
procedures and the
expectation of a low level
of misstatements.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group. Component materiality in relation to
significant components ranged from £1.5m to £4.4m (2023: £1.1m to £4.4m) based on the materiality levels set for the component’s individual entity
audits, while also considering the size and our risk of material misstatement of that component and capping its materiality level where relevant to
take into consideration aggregation risk. In the audit of each component, we further applied performance materiality levels of 75% (2023: 75%) of the
component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £0.1m (2023: £0.09m). We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report and
financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Independent auditor’s report to the members of AJ Bell plc
Strategic report Governance Financial statements Other information
128 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 129
Corporate governance statement
The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and
longer-term viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified; and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment
covers and why the period is appropriate.
Other Code provisions
• Directors’ statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks;
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems; and
• The section describing the work of the Audit Committee
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we are
required to report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ 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 Group’s and the Parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
butis not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed on the following page.
Non-compliance with laws and regulations
We gained an understanding of the legal and regulatory framework
applicable to the Group, components and the industry in which it
operates, and considered the risk of acts by the Group and the
components which were contrary to applicable laws and regulations,
including fraud through inquiries with management, review of the
Board and other committee minutes and our knowledge brought
forward from previous audits. These included but were not limited to
compliance with Companies Act 2006, the relevant accounting
standards, the Financial Conduct Authority’s regulations and the
Listing Rules, as well as consideration of required regulatory capital
levels and whether there was a risk that required capital levels might
be breached in an extreme downside scenario.
We focused on laws and regulations that could give rise to a material
misstatement in the financial statements. Our tests included, but
were not limited to:
• agreement of the financial statement disclosures to underlying
supporting documentation;
• enquiries of management and Those Charged With Governance
relating to the existence of any fraud, contingent liabilities and
non-compliance with laws and regulations;
• review of correspondence with the regulator;
• review of minutes of board meetings and other committee
meetings throughout the period until the date of our audit report
for discussions around potential irregularities throughout the
period and for instances of non-compliance with laws and
regulations and fraud; and
• obtaining an understanding of the control environment in
monitoring compliance with laws and regulations.
Fraud
We assessed the susceptibility of the financial statements to material
misstatement, including fraud.
Our risk assessment procedures included:
• Enquiry with management and those charged with governance
regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and
procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance
for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where
fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
• Considering remuneration incentive schemes and performance
targets and the related financial statement areas impacted by these.
We considered which areas of the financial statements might be the
most susceptible to fraud and irregularities and identified the
following areas:
• Fraud risk on accuracy of custody fees, interest pay-away, and
accrued interest income
• Management override of controls
Our procedures in respect of the above included:
• In addressing Fraud risk on accuracy of custody fees and interest paid
to customers interest payaway, we performed the procedures set out
in the key audit matter section in our report were performed;
• In respect of management override of controls:
– We tested a sample of journals which met defined fraud risk
criteria by agreeing those journals to supporting
documentation and evaluating whether there was evidence of
bias by Directors that represented a risk of material
misstatement due to fraud;
– We tested a risk-based sample of revenue related journals as part
of our overall response to the risk of management override of
controls. We tested each journal in our sample by obtaining an
understanding of the reason the journal entries were posted,
assessing the reasonableness, including incentive and impact on
reporting in line with any key performance indicators and
agreeing the amounts posted to supporting documentation.
– We reviewed the key judgements and estimates, including
impairment of goodwill and intangible, provisions including the
distressed investment provision and calculation of share-based
payments applied by Management in the financial statements
to assess their appropriateness and the existence of any
systematic bias; and
– We tested the completeness and accuracy of data migrated
between the old and new general ledger systems in the year.
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members who were all
deemed to have appropriate competence and capabilities and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of
not detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations
orthrough collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with
laws and regulations is from the events and transactions reflected in
the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the Parent Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the
Parent Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Neil Fung-On
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
4 December 2024
BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).
Independent auditor’s report to the members of AJ Bell plc
Strategic report Governance Financial statements Other information
130 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 131
20242023
Notes£000£000
Revenue
5
269,435
218,234
Administrative expenses
(162,157)
(132,014)
Operating profit
6
107,278
86,220
Investment income
8
6,909
2,393
Finance costs
9
(904)
(952)
Profit before tax
113,283
87,661
Tax expense
10
(28,988)
(19,442)
Profit for the financial year attributable to:
Equity holders of the parent company
84,295
68,219
Earnings per share
Basic (pence)
12
20.46
16.59
Diluted (pence)
12
20.34
16.53
All revenue, profit and earnings are in respect of continuing operations.
There were no other components of recognised income or expense in either period and, consequently, no statement of other comprehensive
income has been presented.
20242023
Notes£000£000
Assets
Non-current assets
Goodwill
13
6,991
6,991
Other intangible assets
14
7,540
7,433
Property, plant and equipment
15
3,777
3,809
Right-of-use assets
16
11,762
10,800
Deferred tax asset
18
1,546
484
31,616
29,517
Current assets
Trade and other receivables
19
59,545
58,501
Current tax receivable
1,069
–
Cash and cash equivalents
20
196,651
146,304
257,265
204,805
Total assets
288,881
234,322
Liabilities
Current liabilities
Trade and other payables
21
(61,921)
(52,437)
Current tax liability
–
(151)
Lease liabilities
16
(1,453)
(1,540)
Provisions
22
(7,421)
(1,126)
(70,795)
(55,254)
Non-current liabilities
Lease liabilities
16
(11,724)
(10,866)
Provisions
22
(2,372)
(2,165)
(14,096)
(13,031)
Total liabilities
(84,891)
(68,285)
Net assets
203,990
166,037
Equity
Share capital
23
52
52
Share premium
8,963
8,963
Own shares
23
(2,049)
(2,377)
Retained earnings
197,024
159,399
Total equity
203,990
166,037
The financial statements were approved by the Board of Directors and authorised for issue on 4 December 2024 and signed on its behalf by:
Peter Birch
Chief Financial Officer
AJ Bell plc
Company registered number: 04503206
Consolidated income statement Consolidated statement of financial position
for the year ended 30 September 2024 as at 30 September 2024
The notes on pages 136 to 163 form an integral part of these financial statements. The notes on pages 136 to 163 form an integral part of these financial statements.
Strategic report Governance Financial statements Other information
132 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 133
Consolidated statement of changes in equity Consolidated statement of cash flows
for the year ended 30 September 2024 for the year ended 30 September 2024
ShareShare RetainedOwn Total
capitalpremiumearningssharesequity
£000 £000 £000 £000 £000
Balance at 1 October 2023
52
8,963
159,399
(2,377)
166,037
Total comprehensive income for the year:
Profit for the year
–
–
84,295
–
84,295
Transactions with owners, recorded directly in equity:
Issue of shares
–
–
–
–
–
Dividends paid (note 11)
–
–
(47,416)
–
(47,416)
Equity settled share-based payment transactions (note 24)
–
–
567
–
567
Deferred tax effect of share-based payment transactions (note 18)
–
–
498
–
498
Tax relief on exercise of share options
–
–
9
–
9
Share transfer relating to EIP (note 23)
–
–
(328)
328
–
Total transactions with owners
–
–
(46,670)
328
(46,342)
Balance at 30 September 2024
52
8,963
197,024
(2,049)
203,990
ShareShare RetainedOwn Total
capitalpremiumearningssharesequity
£000 £000 £000 £000 £000
Balance at 1 October 2022
51
8,930
124,886
(473)
133,394
Total comprehensive income for the year:
Profit for the year
–
–
68,219
–
68,219
Transactions with owners, recorded directly in equity:
Issue of shares
1
33
–
–
34
Dividends paid (note 11)
–
–
(33,294)
–
(33,294)
Equity settled share-based payment transactions (note 24)
–
–
(110)
–
(110)
Deferred tax effect of share-based payment transactions (note 18)
–
–
(88)
–
(88)
Tax relief on exercise of share options
–
–
123
–
123
Share transfer relating to EIP (note 23)
–
–
(96)
96
–
Payment of tax from employee benefit trust
–
–
(241)
–
(241)
Own shares acquired (note 23)
–
–
–
(2,000)
(2,000)
Total transactions with owners
1
33
(33,706)
(1,904)
(35,576)
Balance at 30 September 2023
52
8,963
159,399
(2,377)
166,037
20242023
Notes£000£000
Cash flows from operating activities
Profit for the financial year
84,295
68,219
Adjustments for:
Investment income
8
(6,909)
(2,393)
Finance costs
9
904
952
Income tax expense
10
28,988
19,442
Depreciation, amortisation and impairment
6
3,432
4,788
Share-based payment expense
24
1,502
1,103
Increase in provisions
22
6,061
607
Loss on disposal of intangible assets, property, plant and equipment, and right-of-use assets
340
16
Increase in trade and other receivables
19
(1,044)
(9,065)
Increase in trade and other payables
21
9,484
36,833
Cash generated from operating activities
127,053
120,502
Income tax paid
(30,763)
(19,092)
Net cash flows from operating activities
96,290
101,410
Cash flows from investing activities
Purchase of other intangible assets
14
(1,473)
(1,926)
Purchase of property, plant and equipment
15
(1,476)
(1,574)
Interest received
8
6,909
2,393
Net cash flows generated from / (used in) investing activities
3,960
(1,107)
Cash flows from financing activities
Payments of principal in relation to lease liabilities
16
(1,583)
(1,576)
Payment of interest on lease liabilities
16
(904)
(952)
Proceeds from issue of share capital
23
–
34
Purchase of own shares for employee share schemes
23
–
(2,000)
Payment of tax from employee benefit trust
–
(241)
Dividends paid
11
(47,416)
(33,294)
Net cash flows used in financing activities
(49,903)
(38,029)
Net increase in cash and cash equivalents
50,347
62,274
Cash and cash equivalents at beginning of year
20
146,304
84,030
Total cash and cash equivalents at end of year
20
196,651
146,304
The notes on pages 136 to 163 form an integral part of these financial statements. The notes on pages 136 to 163 form an integral part of these financial statements.
Strategic report Governance Financial statements Other information
134 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 135
Notes to the consolidated financial statements
for the year ended 30 September 2024
1 General information
AJ Bell plc (the ‘Company’) is the Parent Company of the AJ Bell group of companies (together the ‘Group’). The Group provides investment
administration, dealing and custody services. The nature of the Group’s operations and its principal activities are set out in the Strategic report
and the Directors’ report.
The Company is a public limited company which is listed on the Main Market of the London Stock Exchange and incorporated and domiciled in
the United Kingdom. The Company’s number is 04503206 and the registered office is 4 Exchange Quay, Salford Quays, Manchester, M5 3EE. A
list of investments in subsidiaries, including the name, country of incorporation, registered office, and proportion of ownership is given in note 6
of the Company’s separate financial statements.
The consolidated financial statements were approved by the Board on 4 December 2024.
2 Material accounting policies
Basis of accounting
The consolidated financial statements of AJ Bell plc have been prepared in accordance with UK-adopted International Financial
Reporting Standards.
The financial statements are prepared on the historical cost basis and prepared on a going concern basis. They are presented in sterling,
which is the currency of the primary economic environment in which the Group operates, rounded to the nearest thousand.
The accounting policies have been applied consistently to all periods presented in these financial statements and by all Group entities,
unless otherwise stated.
Changes to International Reporting Standards
Interpretations and standards which became effective during the year:
The following amendments and interpretations became effective during the year. Their adoption has not had any significant impact on the Group.
Effective from
IFRS 17
Insurance Contracts
1 January 2023
IAS 8
Definition of Accounting Estimates (Amendments)
1 January 2023
IAS 1
Disclosure of Accounting Policies (Amendments)
1 January 2023
IAS 1
Classification of Liabilities as Current or Non-current (Amendments)
1 January 2023
IAS 12
Deferred Tax relates to Assets and Liabilities arising from a Single Transaction (Amendments)
1 January 2023
Interpretations and standards in issue but not yet effective:
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries) made up to 30 September each year. The Group controls an entity when it is exposed to, or it has rights to variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group reassesses whether it
controls an entity if facts and circumstances indicate there are changes to one or more elements of control. The results of a subsidiary
undertaking are included in the consolidated financial statements from the date the control commences until the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries. Acquisition-related costs are expensed as incurred
in the income statement, except if related to the issue of debt or equity securities. Identifiable assets acquired and liabilities and contingent
liabilities assumed in the business combination are measured initially at their fair values at the acquisition date. The excess of the cost of
acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair
value of the Group’s share of the identifiable net assets of the subsidiary acquired, the difference is taken immediately to the income statement.
All intercompany transactions, balances, income, and expenses are eliminated on consolidation.
2.1 Going concern
The Group’s business activities, together with its financial position and the factors likely to affect its future development and performance are
set out in the Strategic report on pages 1 to 67 and the Directors’ report on pages 120 to 122. Note 25 includes the Group’s policies and
processes for managing exposure to credit and liquidity risk.
The Group’s forecasts and objectives, considering a number of potential changes in trading conditions, show that the Group should be able to
operate at adequate levels of both liquidity and capital for at least 12 months from the date of signing this report. The Directors have performed a
number of stress tests, covering a significant reduction in equity market values, a fall in the Bank of England base interest rate leading to a lower
interest rate retained on customer cash balances, and a further Group-specific idiosyncratic stress relating to a scenario whereby prolonged IT
issues cause a reduction in customers. Further detail of the forecasts and stress test scenarios are set out in the Viability statement on page 67.
These scenarios provide assurance that the Group has sufficient capital and liquidity to operate under stressed conditions.
Consequently, after making reasonable enquiries, the Directors are satisfied that the Group has sufficient financial resources to continue in
business for at least 12 months from the date of signing the report and therefore have continued to adopt the going concern basis in preparing
the consolidated financial statements.
2.2 Segmental reporting
The Group determines and presents operating segments based on the information that is provided internally to the Board, which is the Group’s
Chief Operating Decision Maker (CODM). In assessing the Group’s operating segments the Directors have considered the nature of the services
provided, product offerings, customer bases, operating model and distribution channels amongst other factors. The Directors concluded there
is a single segment as it operates with a single operating model; operations, support and technology costs are managed and reported centrally
to the CODM. A description of the services provided is given within note 4.
2.3 Revenue recognition
Revenue represents fees receivable from investment administration and dealing and custody services for both client assets and client money.
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers
control over a good or service to a customer.
Recurring fixed
Recurring fixed revenue comprises recurring administration fees and media revenue.
Administration fees include fees charged in relation to the administration services provided by the Group and are recognised over time as the
related service is provided.
Included within administration fees are annual pension administration fees. The Group recognises revenue from such fees over time, using an
input method to measure progress towards complete satisfaction of a single performance obligation. The Group determined that the input
method is the best method in measuring progress of the services relating to these fees because there is a direct relationship between the
Group’s effort (i.e. labour hours incurred) and the transfer of service to the customer.
The Group recognises revenue on the basis of the labour hours expended relative to the total expected labour hours to complete the service.
Certain pension administration fees are received in arrears or in advance. Where revenue is received in arrears for an ongoing service, the
proportion of the income relating to services provided but not yet received is accrued. This is recognised as accrued income until the revenue is
received. Where revenue is received in advance for an ongoing service, the proportion of the income relating to services that have not yet been
provided is deferred. This is recognised as deferred income until the services have been provided.
Media revenue includes advertising, subscriptions, events and award ceremony and corporate solutions contracts. Subscriptions and corporate
solutions revenue is recognised evenly over the period in which the related service is provided. Advertising, event and award ceremony revenue
is recognised in the period in which the publication is made available to customers or the event or award ceremony takes place.
Recurring ad valorem
Recurring ad valorem revenue comprises custody fees, retained interest income and investment management fees provided by the Group and
is recognised evenly over the period in which the related service is provided.
Ad valorem fees include custody fees charged in relation to the holding of client assets and interest received on client money balances.
Custody fees and investment management fees are accrued on a time basis by reference to the AUA.
Transactional
Transactional revenue comprises dealing fees and pension scheme activity fees. Transaction-based fees are recognised when received in
accordance with the date of settlement of the underlying transaction.
Other non-recurring fees are recognised in the period to which the service is rendered.
Strategic report Governance Financial statements Other information
136 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 137
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
2 Material accounting policies continued
2.3 Revenue recognition continued
Customer incentives
Customer incentives paid to new retail customers are considered to be a reduction in revenue under IFRS 15. In line with IFRS 15, customer
incentives to acquire new customers are offset against recurring ad valorem revenue and spread over the period which the customer is required
to remain a customer in order to be eligible for the incentive. Customer incentives are paid in cash and vouchers.
2.4 Share-based payments
The Group operates a number of share-based payment arrangements for its employees and non-employees. These generally involve an award
of share options (equity-settled share-based payments) which are measured at the fair value of the equity instrument at the date of grant.
The share-based payment arrangements have conditions attached before the beneficiary becomes entitled to the award. These can be
performance and / or service conditions.
The total cost is recognised, together with a corresponding increase in the equity reserves, over the period in which the performance and / or
service conditions are fulfilled. Costs relating to the development of internally-generated intangible assets are capitalised in accordance with
IAS 38. The cumulative cost recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which
the vesting period has expired and management’s estimate of shares that will eventually vest. At the end of each reporting period, the entity
revises its estimates of the number of share options expected to vest based on the non-market vesting conditions. It recognises any revision to
original estimates in the income statement and to intangible assets where appropriate, with a corresponding adjustment to equity reserves.
No cost is recognised for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional upon a
market or non-vesting condition. These are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied,
provided that all other performance and / or service conditions are satisfied.
The cost of equity-settled awards is determined by the fair value at the date when the grant is made using an appropriate valuation model or the
market value discounted to its net present value, further details of which are given in note 24. The expected life applied in the model has been
adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.
2.5 Investment income
Investment income comprises the returns generated on corporate cash at banks and short-term highly-liquid investments. Investment income
is recognised in the income statement as it accrues, using the effective interest rate method.
2.6 Finance costs
Finance costs comprise interest incurred on lease liabilities recognised under IFRS 16. Finance costs are recognised in the income statement
using the effective interest rate method .
2.7 Taxation
The tax expense represents the sum of the current tax payable and deferred tax. Tax is recognised in the income statement except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable
in respect of previous years, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. Deferred tax is not recognised if the temporary difference arises from:
• the initial recognition of goodwill; or
• investments in subsidiaries to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is
probable they will not reverse in the foreseeable future; or
• the initial recognition of an asset and liability in a transaction other than a business combination that, at the time of the transaction,
affects neither the accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is
probable that taxable profits will be available in the future, against which deductible temporary differences can be utilised. Recognised and
unrecognised deferred tax assets are reassessed at each reporting date.
The principal temporary differences arise from accelerated capital allowances, provisions for share-based payments and unrecognised losses.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
2.8 Goodwill
Goodwill arising on consolidation represents the difference between the consideration transferred and the fair value of net assets acquired of the
subsidiary at the date of acquisition. Goodwill is not amortised, but is reviewed at least annually for impairment. Any impairment is recognised
immediately through the income statement and is not subsequently reversed.
For the purposes of impairment testing goodwill acquired in a business combination is allocated to the cash generating unit (CGU) expecting to
benefit from the synergies of the combination. CGUs to which goodwill has been allocated are reviewed annually or more frequently when there
is an indication that the goodwill relating to that CGU may have been impaired. If the recoverable amount from the CGU is less than the carrying
amount of the assets present on the consolidated statement of financial position forming that CGU, the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to the assets forming that CGU and then to the assets of the CGU pro-rata on the basis of the
carrying amount of each asset in the CGU.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
2.9 Intangible assets (excluding goodwill)
Intangible assets comprise computer software and mobile applications, and the Group’s Key Operating Systems (KOS). These are stated at cost
less amortisation and any recognised impairment loss. Amortisation is charged on all intangible assets excluding goodwill and assets under
construction at rates to write off the cost or valuation, less estimated residual value, of each asset evenly using a straight-line method over its
estimated useful economic life as follows:
Computer software and mobile applications – 3–4 years
KOS – 15 years
KOS enhancements – over the remaining life of the KOS
The assets’ estimated useful lives, amortisation rates and residual values are reviewed, and adjusted if appropriate at the end of each reporting
period. An asset’s carrying value is written down immediately to its recoverable amount if its carrying value is greater than the recoverable amount.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the income statement immediately.
2.10 Internally-generated intangible assets
An internally-generated asset arising from work performed by the Group is recognised only when the following criteria can be demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of expenditure incurred from the date when the asset first
meets the recognition criteria listed above. Development expenditure that does not meet the criteria is recognised as an expense in the period
which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible assets that are acquired separately. Assets under construction are not amortised until the
asset is operational and available for use.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
2.11 Property, plant and equipment
All property, plant and equipment is stated at cost, which includes directly attributable acquisition costs, less accumulated depreciation and any
recognised impairment losses. Depreciation is charged on all property, plant and equipment, except assets under construction, at rates to write
off the cost, less estimated residual value, of each asset evenly using a straight-line method over its estimated useful economic life as follows:
Leasehold improvements – over the life of the lease
Office equipment – 4 years
Computer equipment – 3–5 years
The assets’ estimated useful lives, depreciation rates and residual values are reviewed, and adjusted if appropriate at the end of each reporting
period. An asset’s carrying value is written down immediately to its recoverable amount if its carrying value is greater than the recoverable amount.
Assets under construction relate to capital expenditure on assets not yet in use by the Group and are therefore not depreciated.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the income statement immediately.
Strategic report Governance Financial statements Other information
138 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 139
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
2 Material accounting policies continued
2.12 Leased assets and lease liabilities
Leases
(i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the leases. Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date
less any lease incentives received.
Depreciation is applied in accordance with IAS 16: Property, Plant and Equipment. Right-of-use assets are depreciated over the lease term.
Right-of-use assets are subject to impairment.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments less any lease incentives receivable.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the
interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect
the addition of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a
modification, a change in the lease term, a change in the fixed lease payments or a change in the assessment to purchase the underlying asset.
2.13 Impairment of intangible assets (excluding goodwill), property, plant and equipment
and leased assets
At each reporting date the Group reviews the carrying amount of its intangible assets, property, plant and equipment and leased assets to
determine whether there is any indication that those assets have suffered impairment. If such an indication exists then the recoverable amount
of that particular asset is estimated.
An impairment test is performed for an individual asset unless it belongs to a CGU, in which case the present value of the net future cash
flows generated by the CGU is tested. A CGU is the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or of groups of other assets. An intangible asset with an indefinite useful life or an intangible
asset not yet available for use is tested for impairment annually and whenever there is an indication that the asset may be impaired.
The recoverable amount is the higher of its fair value less costs to sell and its value-in-use. In assessing its value-in-use, the estimated net future
pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or CGU in which the asset sits is estimated to be lower than the carrying value, then the carrying amount
is reduced to the recoverable amount. An impairment loss is recognised immediately in the income statement as an expense.
An impairment loss is reversed only if subsequent events reverse the effect of the original event which caused the recognition of the impairment.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised. An impairment reversal is recognised in the income
statement immediately.
2.14 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that the
Group will be required to settle that obligation.
The amount recognised as a provision is the Directors’ best estimate of the consideration required to settle that obligation at the reporting date
and is discounted to present value where the effect is material.
2.15 Levies
The Group applies the guidance provided in IFRIC 21 to levies issued under the Financial Services Compensation Scheme. The interpretation
clarifies that an entity should recognise a liability when it conducts the activity that triggers the payment of the levy under law or regulation.
2.16 Financial instruments
Financial assets and liabilities are recognised in the statement of financial position when a member of the Group becomes party to the
contractual provisions of the instrument.
Financial assets
Financial assets are classified according to the business model within which the asset is held and the contractual cash-flow characteristics
of the asset. All financial assets are classified at amortised cost.
Financial assets at amortised cost
The Group’s financial assets at amortised cost comprise trade receivables, other receivables and cash and cash equivalents.
Financial assets at amortised cost are initially recognised at fair value including any directly attributable costs. They are subsequently measured
at amortised cost using the effective interest method, less any impairment. No interest income is recognised on financial assets measured at
amortised cost, with the exception of cash and cash equivalents, as all financial assets at amortised cost are short-term receivables and the
recognition of interest would be immaterial. Financial assets are derecognised when the contractual right to the cash flows from the asset expire.
Trade and other receivables
Trade and other receivables are initially recorded at the fair value of the amount receivable and subsequently measured at amortised cost
using the effective interest method, less any provision for impairment. Other receivables also represent client money required to meet
settlement obligations.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, on-demand deposits with banks and other short-term highly-liquid investments with original
maturities of one month or less, or those over which the Group has an immediate right of recall. Where appropriate, bank overdrafts are shown
within borrowings in current liabilities in the consolidated statement of financial position.
Impairment of financial assets
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all
trade receivables and contract assets. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and number of days past due. The Group considers a trade receivable to be in default when it is past due by more than 90 days,
or when the value of a client’s receivable balance exceeds the value of the liquid assets they hold with AJ Bell.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 30 September 2024 and the
corresponding historical credit losses experienced within this period.
The carrying amount of the financial assets is reduced by the use of a provision. When a trade receivable is considered uncollectable, it is
written off against the provision. Subsequent recoveries of amounts previously written off are credited against the provision. Changes in the
carrying amount of the provision are recognised in the income statement.
Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Lease liabilities
Lease liabilities consist of amounts payable by the Group measured at the present value of lease payments to be made over the lease term.
Other financial liabilities
The Group’s other financial liabilities comprised trade and other payables. Other financial liabilities are initially measured at fair value, net of
transaction costs. They are subsequently carried at amortised cost using the effective interest rate method. A financial liability is derecognised
when, and only when, the Group’s obligations are discharged, cancelled or they expire.
Trade and other payables
Trade and other payables consist of amounts payable to clients and other counterparties and obligations to pay suppliers for goods and
services in the ordinary course of business, including amounts recognised as accruals. Trade and other payables are measured at amortised
cost using the effective interest method.
2.17 Employee benefit trust
The employee benefit trusts provide for the granting of shares, principally under share option schemes. AJ Bell plc is considered to have control
of the trusts and so the assets and liabilities of the trusts are recognised as those of AJ Bell plc.
Shares of AJ Bell plc held by the trusts are treated as ‘own shares’ held and shown as a deduction from equity. Subsequent consideration received
for the sale of such shares is also recognised in equity, with any difference between the sales proceeds and original cost being taken to equity.
Strategic report Governance Financial statements Other information
140 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 141
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
3 Critical accounting adjustments and key sources of estimation uncertainty
In the application of the Group’s material accounting policies, which are described in note 2, the Directors are required to make judgements,
estimates and assumptions to determine the carrying amounts of certain assets and liabilities. The estimates and associated assumptions are
based on the Group’s historical experience and other relevant factors. Actual results may differ from the estimates applied.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
There are no judgements made, in applying the material accounting policies, about the future, or any other major sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
4 Segmental reporting
It is the view of the Directors that the Group has a single operating segment being investment services in the advised and D2C space
administering investments in SIPPs, ISAs and General Investment / Dealing Accounts. Details of the Group’s revenue, results and assets and
liabilities for the reportable segment are shown within the consolidated income statement and consolidated statement of financial position
on pages 132 and 133 respectively.
The Group operates in one geographical segment, being the UK.
Due to the nature of its activities, the Group is not reliant on any one customer or group of customers for generation of revenues.
5 Revenue
The analysis of the consolidated revenue is as follows:
2024 2023
£000 £000
Recurring fixed
32,078
30,666
Recurring ad valorem
202,040
161,152
Transactional
35,317
26,416
269,435
218,234
Recurring ad valorem fees include custody fees. These recurring charges are derived from the market value of retail customer assets, based on
asset mix and portfolio size, and are therefore subject to market and economic risks. The rate charged is variable dependent on the product,
portfolio size and asset mix within the portfolio. The risks associated with this revenue stream, in terms of its nature and uncertainty, are
discussed further within the financial instruments and risk management note 25 on page 159.
Recurring ad valorem fees also include retained interest income earned on the level of customer cash balances, which are based on product
type, customers’ asset mix and portfolio size and are therefore subject to market and economic risks. The risks associated with this revenue
stream, in terms of its nature and uncertainty, are discussed further within the financial instruments and risk management note 25 on page 159.
The total revenue for the Group has been derived from its principal activities undertaken in the UK.
6 Operating profit
Profit for the financial year has been arrived at after charging:
2024 2023
£000 £000
Amortisation of intangible assets (note 14)
430
2,055
Depreciation of property, plant and equipment (note 15)
1,170
1,079
Depreciation of right-of-use assets (note 16)
1,832
1,654
Loss on the disposal of intangible assets, property, plant and equipment, and right-of-use assets
340
16
Auditor’s remuneration (see below)
1,101
1,093
Provision for redress (note 22)
6,239
778
Staff costs (note 7)
80,340
64,758
During the year there was £nil in relation to research and development expensed to the income statement (2023: £nil).
Auditor’s remuneration
The analysis of auditor’s remuneration is as follows:
2024 2023
£000 £000
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
345
329
Fees payable to the Company’s auditor for the audit of the Company’s subsidiaries’ accounts, pursuant
to legislation
494
589
Audit-related assurance services
199
115
Other assurance services
63
60
1,101
1
1,093
1
1. Of which £90,000 relates to the audit the year end 2023 (2023: £215,000 relates to the audit for the year end 2022).
Of the above, audit-related services for the year totalled £1,072,000 (2023: £1,063,000).
7 Staff costs
The average monthly number of employees (including Executive Directors) of the Group was:
2024 2023
No. No.
Operational and support
928
856
Technology
330
279
Distribution
163
140
1,421
1,275
Employee benefit expense for the Group during the year:
2024 2023
£000 £000
Wages and salaries
62,164
51,854
Social security costs
7,505
5,846
Retirement benefit costs
8,427
5,937
Termination benefits
742
18
Share-based payments (note 24)
1,502
1,103
80,340
64,758
In addition to the above, £1,472,000 staff costs (2023: £1,919,000) have been capitalised as an internally generated intangible asset (see note 14).
8 Investment income
2024 2023
£000 £000
Interest income on cash balances
6,909
2,393
9 Finance costs
2024 2023
£000 £000
Interest on lease liabilities
904
952
Strategic report Governance Financial statements Other information
142 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 143
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
10 Taxation
Tax charged in the income statement:
2024 2023
£000 £000
Current taxation
UK corporation tax
29,564
19,750
Adjustment to current tax in respect of prior periods
(12)
(346)
29,552
19,404
Deferred taxation
Origination and reversal of temporary differences
(537)
(170)
Adjustment to deferred tax in respect of prior periods
(27)
341
Effect of changes in tax rates
–
(133)
(564)
38
Total tax expense
28,988
19,442
Corporation tax is calculated at 25% of the estimated assessable profit for the year to 30 September 2024 (2023: 22%).
In addition to the amount charged to the income statement, certain tax amounts have been credited directly to equity as follows:
2024 2023
£000 £000
Deferred tax relating to share-based payments (note 18)
(498)
88
Current tax relief on exercise of share options
(9)
(123)
(507)
(35)
The charge for the year can be reconciled to the profit per the income statement as follows:
2024 2023
£000 £000
Profit before tax
113,283
87,661
UK corporation tax at 25% (2023: 22%):
28,321
19,293
Effects of:
Expenses not deductible for tax purposes
363
(22)
Income not taxable in determining taxable profit
(461)
(16)
Amounts not recognised
804
325
Effect of rate changes to deferred tax
–
(133)
Adjustments to current and deferred tax in respect of prior periods
(39)
(5)
28,988
19,442
Effective tax rate
25.6%
22.2%
Deferred tax has been recognised at 25%, being the rate expected to be in force at the time of the reversal of the temporary difference
(2023: 25%). A deferred tax asset in respect of future share option deductions has been recognised based on the Company’s share price
at 30 September 2024.
11 Dividends
2024 2023
£000 £000
Amounts recognised as distributions to equity holders during the year:
Final dividend of 7.25p (2022: 4.59p per share)
29,891
18,893
Interim dividend of 4.25p (2023: 3.50p per share)
17,525
14,401
Total dividends paid
47,416
33,294
Proposed final dividend of 8. 2 5p (2023: 7.25p) per share
34,019
29,807
A final dividend declared of 8.25p per share is payable on 7 February 2025 to shareholders on the register on 10 January 2025. The ex-dividend
date will be 9 January 2025. The final dividend is subject to approval by the shareholders at the Annual General Meeting on 29 January 2025
and has not been included as a liability within these financial statements.
Dividends are payable on all ordinary shares as disclosed in note 23.
The employee benefit trusts, which held 689,728 ordinary shares (2023: 1,082,343) in AJ Bell plc at 30 September 2024, have agreed to waive
all dividends. This represented 0.2% (2023: 0.3%) of the Company’s called-up share capital. The maximum amount held by the trusts during the
year was 1,082,343.
12 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Parent Company by the weighted average number
of ordinary shares, excluding own shares, in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of shares to assume exercise of all potentially dilutive share options.
The weighted average number of anti-dilutive share options and awards excluded from the calculation of diluted earnings per share was
219,558 as at 30 September 2024 (2023: 148,995).
The calculation of basic and diluted earnings per share is based on the following data:
2024 2023
£000 £000
Earnings
Earnings for the purposes of basic and diluted earnings per share being profit attributable to the owners
of the Parent Company
84,295
68,219
2024 2023
No. No.
Number of shares
Weighted average number of ordinary shares for the purposes of basic EPS in issue during the year
412,040,137
411,242,458
Effect of potentially dilutive share options
2,313,011
1,405,191
Weighted average number of ordinary shares for the purposes of fully diluted EPS
414,353,148
412,647,649
2024
2023
Earnings per share (EPS)
Basic (pence)
20.46
16.59
Diluted (pence)
20.34
16.53
Strategic report Governance Financial statements Other information
144 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 145
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
13 Goodwill
2024 2023
£000 £000
Cost
As at 1 October and 30 September
7,103
7,103
Impairment
As at 1 October and 30 September
(112)
(112)
Carrying value at 30 September
6,991
6,991
Goodwill relates to acquisitions allocated to the Group’s single cash generating unit (CGU).
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.
The recoverable amount of the assets within the CGU is determined using value-in-use calculations. In assessing the value-in-use the
estimated future cash flows of the CGU are discounted to their present value using a pre-tax discount rate. Cash flows are based upon the most
recent forecasts, approved by the Board, covering a three-year period.
The key assumptions for value-in-use calculations are those regarding discount rate, growth rates and expected changes to revenues and costs
in the period, as follows:
• a compound rate of 6.4% (2023: 9.5%) has been used to assess the expected growth in revenue for the three-year forecast period. This is
based on a combination of historical and expected future performance;
• benefits realised from our economies of scale are passed onto customers in the form of price reductions; and
• modest ongoing maintenance expenditure is required on the assets within the CGU in order to generate the expected level of cash flows.
The Directors have made these assumptions based upon past experience and future expectations in light of anticipated market conditions and
the results of streamlining processes through implementation of the target operating model for customer services.
Cash flows have been discounted using a pre-tax discount rate of 11.4% (2023: 8.6%).
The pre-tax discount rate has been calculated using an independent external source. The Directors have performed sensitivity analysis on
their calculations, with key assumptions being revised adversely to reflect the potential for future performance being below expected levels.
Changes to revenue are the most sensitive as they would have the greatest impact on future cash flows. However, even with a 25% reduction in
revenue, there would still be sufficient headroom to support the carrying value of the assets under the CGU.
Based upon the review above, the estimated value-in-use of the CGU comfortably supports the carrying value of the assets held within it, and
so the Directors are satisfied that for the period ended 30 September 2024 goodwill is not impaired.
14 Other intangible assets
Computer
Key software and
operating mobile
system applications Total
£000 £000 £000
Cost
At 1 October 2022
14,430
7,036
21,466
Additions
706
7
713
Disposals
–
(36)
(36)
At 30 September 2023
15,136
7,007
22,143
Additions
537
1
538
Disposals
–
(238)
(238)
At 30 September 2024
15,673
6,770
22,443
Amortisation
As at 1 October 2022
7,528
5,159
12,687
Amortisation and impairment
337
1,718
2,055
Eliminated on disposal
–
(32)
(32)
At 30 September 2023
7,865
6,845
14,710
Amortisation
338
92
430
Eliminated on disposal
–
(237)
(237)
At 30 September 2024
8,203
6,700
14,903
Carrying amount
At 30 September 2024
7,470
70
7,540
At 30 September 2023
7,271
162
7,433
At 30 September 2022
6,902
1,877
8,779
Average remaining amortisation period
1 year
Nil
The amortisation and impairment charge above is included within administrative expenses in the income statement.
Additions include an amount of £537,000 relating to internally generated assets for the year ended 30 September 2024 (2023: £706,000).
Total additions in the period are net of a credit of £935,000 related to the reversal of capitalised share-based payment expenses (2023: credit of
£1,213,000). The reversal recognised in the period is due to the lapse of previously issued equity instruments under the earn-out arrangement
(note 24).
The net carrying amount of key operating systems includes £6,967,000 (2023: £6,430,000) relating to assets in development which are
currently not amortised. At the year end, the Group had not entered into any contractual commitments (2023: £nil) for the acquisition of
intangible assets.
Strategic report Governance Financial statements Other information
146 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 147
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
15 Property, plant and equipment
Leasehold Office Computer
improvements equipment equipment Total
£000 £000 £000 £000
Cost
At 1 October 2022
2,201
975
6,269
9,445
Additions
186
42
1,346
1,574
Disposals
–
(9)
(241)
(250)
At 30 September 2023
2,387
1,008
7,374
10,769
Additions
645
7
824
1,476
Disposals
(3)
(529)
(1,187)
(1,719)
Transfers
–
20
(20)
–
At 30 September 2024
3,029
506
6,991
10,526
Depreciation
At 1 October 2022
822
868
4,430
6,120
Charge for the year
174
58
847
1,079
Eliminated on disposal
–
(9)
(230)
(239)
At 30 September 2023
996
917
5,047
6,960
Charge for the year
204
23
943
1,170
Eliminated on disposal
(2)
(496)
(883)
(1,381)
Transfers
–
36
(36)
–
At 30 September 2024
1,198
480
5,071
6,749
Carrying amount
At 30 September 2024
1,831
26
1,920
3,777
At 30 September 2023
1,391
91
2,327
3,809
At 30 September 2022
1,379
107
1,839
3,325
The depreciation charge above is included within administrative expenses in the income statement.
At the year end, the Group had entered into contractual commitments for the acquisition of property, plant and equipment to the value of
£177,000 (2023: £nil).
Computer equipment includes assets under construction of £117,000 (2023: £68,000) which are currently not depreciated.
16 Leases
i) Right-of-use assets
Computer and
office
Property equipment Total
£000 £000 £000
Cost
At 1 October 2022
16,696
252
16,948
Additions
161
21
182
Disposals
–
(6)
(6)
At 30 September 2023
16,857
267
17,124
Additions
2,759
36
2,795
Disposals
–
(1)
(1)
At 30 September 2024
19,616
302
19,918
Depreciation
At 1 October 2022
4,481
194
4,675
Charge for the year
1,617
37
1,654
Disposals
–
(5)
(5)
At 30 September 2023
6,098
226
6,324
Charge for the year
1,799
33
1,832
At 30 September 2024
7,897
259
8,156
Carrying amount
At 30 September 2024
11,719
43
11,762
At 30 September 2023
10,759
41
10,800
At 30 September 2022
12,215
58
12,273
The depreciation charge above is included within administrative expenses in the income statement.
The Group has entered into various leases in respect of property and office equipment as a lessee. Lease terms are negotiated on an individual
basis and contain a range of different terms and conditions. Property leases typically run for a period of five to fifteen years and office equipment
for a period of one to six years.
Additions include £441,000 relating to the increase in the Group’s dilapidation provision (2023: £161,000) (see note 22).
Other than property and office equipment there are no further classes of assets leased by the Group.
ii) Lease liabilities
2024 2023
£000 £000
Current
1,453
1,540
Non-current
11,724
10,866
13,177
12,406
The undiscounted maturity analysis of lease liabilities is shown below:
2024 2023
£000 £000
Within one year
2,363
2,384
In the second to fifth years inclusive
10,572
8,216
After five years
3,603
5,525
Total minimum lease payments
16,538
16,125
The total lease interest expense for the year ended 30 September 2024 was £904,000 (2023: £952,000). Principal cash outflow for leases
accounted for under IFRS 16 for the year ended 30 September 2024 was £1,583,000 (2023: £1,576,000).
Strategic report Governance Financial statements Other information
148 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 149
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
17 Subsidiaries
The Group consists of a Parent Company, AJ Bell plc incorporated within the UK, and a number of subsidiaries held directly and indirectly by
AJ Bell plc which operate and are incorporated in the UK. Note 6 to the Company’s separate financial statements lists details of the interests
in subsidiaries.
18 Deferred tax asset
2024 2023
£000 £000
Deferred tax asset
1,869
999
Deferred tax liability
(323)
(515)
1,546
484
The movement on the deferred tax account and movement between deferred tax assets and liabilities is as follows:
Accelerated Short-term
capital Share-based timing
allowances payments differences Total
£000 £000 £000 £000
At 1 October 2022
(296)
746
160
610
Credit / (charge) to income statement
(219)
80
101
(38)
Charge to equity
–
(88)
–
(88)
At 30 September 2023
(515)
738
261
484
Credit / (charge) to income statement
192
393
(21)
564
Credit to equity
–
498
–
498
At 30 September 2024
(323)
1,629
240
1,546
The current year deferred tax adjustment relating to share-based payments reflects the estimated total future tax relief associated with the
cumulative share-based payment benefit arising in respect of share options granted but unexercised as at 30 September 2024.
Deferred tax assets have been recognised in respect of other temporary differences giving rise to deferred tax assets where it is probable
that these assets will be recovered. As at 30 September 2024, deferred tax assets have not been recognised on trading losses of £8,736,000
(2023: £5,524,000).
19 Trade and other receivables
2024 2023
£000 £000
Trade receivables
3,409
2,613
Prepayments
7,812
8,861
Accrued income
37,327
33,662
Other receivables
10,997
13,365
59,545
58,501
The Directors consider that the carrying amount of trade and other receivables approximates their fair value. Included within other receivables
is client money required to meet settlement obligations, which is payable on demand.
Included within accrued income is £1,123,000 (2023: £1,081,000) relating to contract assets, a movement of £42,000 (2023: £97,000) during
the year due to increased revenues.
The ageing profile of trade receivables was as follows:
2024 2023
£000 £000
Current – not past due
2,202
1,137
Past due:
0 to 30 days
449
476
31 to 60 days
168
279
61 to 90 days
164
173
91 days and over
1,414
1,341
4,397
3,406
Provision for impairment
(988)
(793)
3,409
2,613
The movement in the provision for impairment of trade receivables is as follows:
2024 2023
£000 £000
Opening loss allowance as at 1 October
793
605
Loss allowance recognised
308
254
Receivables written off during the year as uncollectable
(89)
(8)
Unused amount reversed
(24)
(58)
Balance at end of year
988
793
20 Cash and cash equivalents
2024 2023
£000 £000
Group cash and cash equivalent balances
196,651
146,304
Cash and cash equivalents at 30 September 2024 and 30 September 2023 are considered to be holdings of less than one month, or those over
which the Group has an immediate right of recall.
21 Trade and other payables
2024 2023
£000 £000
Trade payables
463
960
Social security and other taxes
3,822
3,453
Other payables
749
859
Accruals
54,661
45,043
Deferred income
2,226
2,122
61,921
52,437
Trade payables, accruals and deferred income principally comprise amounts outstanding for trade purposes including payment of interest to
customers and ongoing costs of the business. The Directors consider that the carrying amount of trade payables approximates their fair value.
Deferred income in the current and prior year relates to contract liabilities. Of the prior year deferred revenue balance, £2,117,000 has now
been recognised as revenue. The current year balance all relates to cash received in the current period. Total deferred income as at 30
September 2024 is expected to be recognised as revenue in the coming year.
Strategic report Governance Financial statements Other information
150 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 151
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
22 Provisions
Office Redress Other
dilapidations provision provisions Total
£000 £000 £000 £000
At 1 October 2023
2,165
778
348
3,291
Additional provisions
441
6,239
–
6,680
Provisions used
–
–
(178)
(178)
At 30 September 2024
2,606
7,017
170
9,793
Included in current liabilities
234
7,017
170
7,421
Included in non-current liabilities
2,372
–
–
2,372
Office dilapidations
The Group is contractually obliged to reinstate its leased properties to their original state and layout at the end of the lease terms. During the
year, management reviewed the Group’s dilapidation provision and the assumptions on which the provision is based. The estimate is based
upon property location, size of property and an estimate of the charge per square foot. A further charge of £441,000 has been recognised.
Of this amount, £114,000 is due to an increase in the estimated charge per square foot and £327,000 is in relation to an increase in office
floorspace. The office dilapidations provision represents management’s best estimate of the costs which will ultimately be incurred in settling
these obligations.
Redress provision
The provision has been recognised in relation to costs for potential customer redress. The redress relates to potential liability for historical SIPP
operator due diligence issues in respect of non-mainstream investments, which subsequently became distressed, made by customers who had
regulated financial advisers acting for them between April 2007 and 2014 and does not relate to ongoing business operations. Based on
published Financial Ombudsman Service decisions, we believe that future complaints would be time-limited.
The figure represents our current most reliable estimate of the present obligation, accepting that there is still some uncertainty regarding the
amounts required to settle the obligations as work is ongoing. The estimate has been made by assessing a range of different outcomes based
on key assumptions, including the calculation of investment loss, application of limitation, customer response rates, and customers having
already received compensation from other sources. Sensitivity analysis of these key assumptions would be unlikely to have a material impact on
the consolidated financial statements.
The timings of the outflows are uncertain and could be paid within 12 months of the date of the statement of financial position.
Other provisions
The other provisions relate to the costs associated with defending a legal case.
The timings of the outflows are uncertain and could be paid within 12 months of the date of the statement of financial position.
23 Share capital
2024 2023 2024 2023
Issued, fully-called and paid Number Number £ £
Ordinary shares of 0.0125p each
413,044,826
412,211,306
51,631
51,526
All ordinary shares have full voting and dividend rights.
The following transactions have taken place during the year:
Share
Number of premium
Transaction type
Share class
shares £000
Exercise of EIP options
Ordinary shares of 0.0125p each
116,653
–
Free shares
Ordinary shares of 0.0125p each
716,867
–
833,520
–
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general
meetings of the Company. They are entitled to share in the proceeds on the return of capital, or upon the winding up of the Company in
proportion to the number of and amounts paid on shares held. The shares are non-redeemable.
Own shares
As at 30 September 2024, the Group held 689,728 own shares in employee benefit trusts (2023: 1,082,343) to satisfy future share incentive
plans. Shares held by the Trust are held at £2,049,000 (2023: £2,377,000) being the price paid to repurchase, and the carrying value is shown as
a reduction within shareholders’ equity.
During the year 392,615 EIP options (2023: 115,908) were exercised and issued from the employee benefit trusts in the year.
The costs of operating the trusts are borne by the Group but are not material. The trusts waived the right to receive dividends on these shares.
24 Share-based payments
Company Share Option Plan (CSOP)
The CSOP is a HMRC-approved scheme in which the Board, at their discretion, grants options to employees to purchase ordinary shares. Each
participating employee can be granted options up to the value of £60,000. Options granted under the CSOP can be exercised between the
third and tenth anniversary after the date of grant and are usually forfeited if the employee leaves the Group before the option expires. The
expense for share-based payments under the CSOP is recognised over the respective vesting period of these options.
Option To Buy Scheme (OTB) – Growth shares
The OTB scheme is a historical award scheme whereby the Board at its discretion granted growth shares to employees. Growth shares entitled
the holder to participate in the growth value of the Group above a certain threshold level, set above the current market value of the Group
at the time the shares were issued. Growth shares granted under the OTB scheme had different vesting conditions. The vesting condition
attached to all growth shares granted is that the threshold level needs to be met and an exit event needs to have occurred. As part of the AJ Bell
listing process all awards were converted into ordinary shares and those awards granted with an additional employment condition of four or six
years after the date of grant, continue to be recognised as a share-based payment. Awards that were issued subject to employment conditions
are subject to buy back options under which the Group can buy back the shares for their issue price if the employee leaves the Group before
the expiry of the employment condition period.
Buy As You Earn plan (BAYE)
The BAYE plan is an all-employee share plan under which shares can be issued to employees as either free shares or partnership shares.
The Company may grant free shares up to a maximum of £3,600 per employee in a tax year. During the year, free shares up to a maximum
value of £2,000 have been offered to all employees who were employed by the Company at 30 June 2023 (2023: £2,000).
Employees have been offered the opportunity to participate in the partnership plan to enable such employees to use part of their pre-tax salary
to acquire shares. The limit to the pre-tax salary deduction is £1,800 or, if lower, 10% of salary each year.
The plan entitles employees to use this deduction to buy shares in the Company on a monthly basis at the current market value. Employees are
able to withdraw their shares from the plan at any time but may be subject to income tax and national insurance charges if withdrawn within
three years of purchasing the shares. Therefore, the monthly partnership plan does not give rise to a share-based payment charge.
Executive Incentive Plan (EIP)
The EIP is a performance share plan that involves the award of nominal cost options to participants conditional on the achievement of specified
performance targets and continuous employment over a certain period of time. Individual grants will be dependent on the assessment of
performance against a range of financial and non-financial targets set at the beginning of the financial year.
Senior Manager Incentive Plan (SMIP)
The SMIP is a performance share plan that involves the award of nominal cost options to participants conditional on the achievement of
specified performance targets and continuous employment over a certain period of time. Individual grants will be dependent on the
assessment of performance against a range of financial and non-financial targets set at the beginning of the financial year.
Nil Cost Options plan (NCO)
The NCO plan is a discretionary scheme in which the Board grants options to employees to obtain ordinary shares at nil cost. Options granted
under the NCO plan can be exercised between the third and tenth anniversary after the date of grant and are usually forfeited if the employee
leaves the Group before the option expires. The expense for the share-based payments under the NCO plan is recognised over the respective
vesting period of these options.
Strategic report Governance Financial statements Other information
152 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 153
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
24 Share-based payments continued
CSR initiative
A CSR initiative was introduced in December 2019 with the intention of giving an additional contribution to charity through the donation of share
options should a number of stretching targets be met by the Group. The awards made are equity-settled awards and involved the grant of market
value options to the AJ Bell Trust conditional on the achievement of diluted earnings per share (DEPS) targets for the financial years 2022, 2023 and
2024 (Performance Period).
The exercise of each tranche will be conditional upon the DEPS having increased in relation to the 7.47 pence DEPS for the year ended 30
September 2019, by more than:
• 90% for September 2022;
• 115% for September 2023; and
• 140% for 30 September 2024.
These are considered to be the lower DEPS targets. The upper DEPS target for each performance period is 10% above the lower DEPS target.
The percentage of shares granted that will vest in each performance period is determined as follows:
• if actual DEPS is below the lower DEPS target, the vesting percentage is equal to zero;
• if actual DEPS is above the upper DEPS target, the vesting percentage is equal to 100%; and
• if actual DEPS is between the lower and upper target, then the vesting percentage is determined by linear interpolation on a straight-line
basis and rounded down to the nearest 10%.
As no service is being provided by the AJ Bell Trust, all conditions involved in the arrangement are considered to be non-vesting conditions.
Non-vesting conditions should be taken into account when estimating the fair value of the equity instrument granted. The fair value has been
estimated using the Monte Carlo simulation model.
Earn-out arrangement
The acquisition of Adalpha gave rise to an earn-out arrangement whereby share awards are made on the completion of a number of operational
and financial milestones, relating to AUA targets and the development of a simplified proposition for financial advisers. The awards are equity-
settled and vest in several tranches in line with the agreed milestones.
Under the terms of the acquisition agreement, eligible employees are entitled to share awards conditional upon the successful completion of
certain performance milestones and their continued employment with the Group during the vesting period. There is no exercise price attached
to the share award.
The fair value of the earn-out arrangement is estimated as at the date of grant calculated by reference to the quantum of the earn-out payment for
each performance milestone and an estimated time to proposition completion, discounted to net present value. The performance conditions
included within the arrangement are not considered market conditions and therefore the expected vesting is reviewed at each reporting date.
Movements during the year
The tables below summarise the outstanding options for each share-based payment scheme.
CSOP
2024
2023
Weighted Weighted
Average Average
Exercise Price Exercise Price
Number £ Number £
Outstanding at the beginning of the year
182,075
3.91
1,101,893
3.90
Granted during the year
1,753,272
2.80
223,167
3.73
Forfeited during the year
(80,452)
3.42
(1,111,523)
3.94
Exercised during the year
–
–
(31,462)
1.04
Outstanding at the end of the year
1,854,895
2.88
182,075
3.91
Exercisable at the end of the year
61,677
4.13
39,339
3.94
The lowest exercise price for share options outstanding at the end of the period was 275p (2023: 298p) and the highest exercise price was 434p
(2023: 434p). The weighted average remaining contractual life of share options outstanding at the end of the period was 8.9 years (2023: 7.6 years).
OTB – Growth shares
2024
2023
Weighted Weighted
Average Average
Exercise Price Exercise Price
Number £ Number £
Outstanding at the beginning of the year
1,166,131
0.63
1,166,131
0.63
Vested
1,166,131
0.63
–
–
Outstanding at the end of the year
–
–
1,166,131
0.63
Upon listing to the London Stock Exchange, all growth shares were converted to ordinary shares. The shares vested in full during the year.
EIP
2024
2023
Weighted Weighted
Average Average
Exercise Price Exercise Price
Number £ Number £
Outstanding at beginning of the year
1,675,192
0.000125
1,615,868
0.000125
Granted during the year
1,533,866
0.000125
912,833
0.000125
Exercised during the year
(509,268)
0.000125
(646,211)
0.000125
Lapsed during the year
(418,696)
0.000125
(207,298)
0.000125
Outstanding at the end of the year
2,281,094
0.000125
1,675,192
0.000125
Exercisable at the end of the year
269,809
0.000125
349,055
0.000125
The weighted average remaining contractual life of EIP shares outstanding at the end of the period was 8.6 years (2023: 8.3 years).
SMIP
2024
2023
Weighted Weighted
Average Average
Exercise Price Exercise Price
Number
£
Number
£
Outstanding at beginning of the year
3,999
0.000125
–
–
Granted during the year
52,376
0.000125
3,999
0.000125
Lapsed during the year
(6,424)
0.000125
–
–
Outstanding at the end of the year
49,951
0.000125
3,999
0.000125
Exercisable at the end of the year
–
–
–
–
The weighted average remaining contractual life of SMIP shares outstanding at the end of the period was 9.2 years.
NCO
2024
Weighted
Average
Exercise Price
Number £
Outstanding at beginning of the year
–
–
Granted during the year
74,460
–
Outstanding at the end of the year
74,460
–
Exercisable at the end of the year
–
–
The weighted average remaining contractual life of NCO outstanding at the end of the period was 9.2 years.
Strategic report Governance Financial statements Other information
154 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 155
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
24 Share-based payments continued
CSR initiative
2024
2023
Weighted Weighted
Average Average
Exercise Price Exercise Price
Number £ Number £
Outstanding at beginning of the year
1,330,008
4.01
1,662,510
4.01
Forfeited during the year
–
–
(332,502)
4.01
Outstanding at the end of the year
1,330,008
4.01
1,330,008
4.01
Exercisable at the end of the year
1,330,008
4.01
498,753
4.01
The weighted average remaining contractual life of CSR options outstanding at the end of the period was 5.2 years (2023: 6.2 years).
Weighted average share price of options exercised
The weighted average share price of all options exercised during the year was £2.86 (2023: £3.46).
Measurement
The fair value of equity-settled share options granted is estimated as at the date of grant using the Black-Scholes model, taking into account the
terms upon which the options and awards were granted.
The inputs into the Black-Scholes model and assumptions used in the calculations are as follows:
CSOP
Grant date
03/10/2023
15/12/2023
Number of shares under option
1,493,772
259,500
Fair value of share option from generally accepted business model (£)
0.60
0.82
Share price (£)
2.64
3.13
Exercise price of an option (£)
2.75
3.06
Expected volatility
36.38%
38.14%
Expected dividend yield
3.07%
2.59%
Risk-free interest rate
4.73%
3.96%
Expected option life to exercise (months)
36
36
EIP
Grant date
15/12/2023
15/12/2023
15/12/2023
Number of shares under option
688,849
150,605
694,412
Fair value of share option from generally accepted business model (£)
3.05
3.13
3.13
Share price (£)
3.13
3.13
3.13
Exercise price of an option (£)
0.000125
0.000125
0.000125
Expected volatility
37.99%
38.14%
38.14%
Expected dividend yield
2.59%
0.00%
0.00%
Risk-free interest rate
5.01%
3.96%
3.76%
Expected option life to exercise (months)
12
36
48
SMIP
Grant date
15/12/2023
15/01/2024
25/03/2024
Number of shares under option
49,407
571
2,398
Fair value of share option from generally accepted business model (£)
2.89
2.72
2.72
Share price (£)
3.13
2.95
3.02
Exercise price of an option (£)
0.000125
0.000125
0.000125
Expected volatility
38.14%
37.52%
36.53%
Expected dividend yield
2.59%
2.74%
3.56%
Risk-free interest rate
3.96%
3.78%
4.00%
Expected option life to exercise (months)
36
36
36
NCO
Grant date
03/10/2023
15/12/2023
15/01/2024
Number of shares under option
13,497
41,825
19,138
Fair value of share option from generally accepted business model (£)
2.41
2.89
2.74
Share price (£)
2.64
3.13
2.95
Exercise price of an option (£)
–
–
–
Expected volatility
36.38%
38.14%
37.52%
Expected dividend yield
3.07%
2.59%
2.74%
Risk-free interest rate
4.73%
3.96%
3.78%
Expected option life to exercise (months)
36
36
36
Expected volatility is estimated by considering historic average share price volatility at the grant date.
The expected life of the options is based on the minimum period between the grant of the option, the earliest possible exercise date and an
analysis of the historical exercise data that is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the
assumption that historical volatility is indicative of future trends, which may also not necessarily be the case.
During the year, the Group recognised a total share-based payment expense of £1,502,000 (2023: £1,103,000) and reversed £935,000 of
capitalised share-based payment expense (2023: reversed capitalised amount of £1,213,000) within the statement of financial position.
The reversal recognised in the period is due to the lapse of previously issued equity instruments under the earn-out arrangement. The costs of
these instruments had been recognised over the vesting period, but, as they have now lapsed, the previously recognised costs have been reversed.
Strategic report Governance Financial statements Other information
156 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 157
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
25 Financial instruments and risk management
The Group’s activities expose it to a variety of financial instrument risks: market risk (including interest rate and foreign exchange), credit risk and
liquidity risk. Information is presented below regarding the exposure to each of these risks, including the procedures for measuring and
managing them.
Financial instruments include both financial assets and financial liabilities. Financial assets principally comprise trade and other receivables and
cash and cash equivalents. Financial liabilities comprise trade and other payables and lease liabilities. The Group does not have any derivative
financial instruments.
Risk management objectives
The Group has identified the financial, business and operational risks arising from its activities and has established policies and procedures to
manage these items in accordance with its risk appetite. The Board of Directors has overall responsibility for establishing and overseeing the
Group’s risk management framework and risk appetite.
The Group’s financial risk management policies are intended to ensure that risks are identified, evaluated and subject to ongoing monitoring
and mitigation (where appropriate). These policies also serve to set the appropriate control framework and contribute towards a robust risk
culture within the business.
The Group regularly reviews its financial risk management policies and systems to reflect changes in the business, counterparties, markets and
range of financial instruments that it uses.
The Finance & Treasury Committee has principal responsibility for monitoring exposure to the risks associated with cash and cash equivalents.
Policies and procedures are in place to ensure the management and monitoring of each type of risk. The primary objective of the Group’s
Treasury Policy Statements is to manage short-term liquidity requirements whilst maintaining an appropriate level of exposure to other financial
risks in accordance with the Group’s risk appetite.
Material accounting policies
Details of the material accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and
expenses are recognised, in respect of each financial asset and financial liability, are disclosed within note 2 to the consolidated financial statements.
Categories of financial instrument
The financial assets and liabilities of the Group are detailed below:
2024
2023
Financial assets at Financial liabilities Carrying Financial assets at Financial liabilities Carrying
amortised cost at amortised cost value amortised cost at amortised cost value
£000 £000 £000 £000 £000 £000
Financial assets
Trade receivables
3,409
–
3,409
2,613
–
2,613
Accrued income
37,327
–
37,327
33,662
–
33,662
Other receivables
10,997
–
10,997
13,365
–
13,365
Cash and cash equivalents
196,651
–
196,651
146,304
–
146,304
248,384
–
248,384
195,944
–
195,944
Financial liabilities
Trade and other payables
–
55,169
55,169
–
46,030
46,030
Lease liabilities
–
13,177
13,177
–
12,406
12,406
–
68,346
68,346
–
58,436
58,436
The carrying amount of all financial assets and liabilities is approximate to their fair value due to their short-term nature.
Market risk
Interest rate risk
The Group holds interest-bearing assets in the form of cash and cash deposits. Cash at bank earns interest at floating rates based on daily bank
deposit rates. Term deposits can also be made for varying periods depending on the immediate cash requirements of the Group, and interest is
earned at the respective fixed-term rate. Based on the cash balances shown in the Group’s statement of financial position at the reporting date,
if interest rates were to move by 25bps it would change profit before tax by approximately:
2024 2023
£000 £000
+ 25 bps (0.25%)
418
293
- 25 bps (0.25%)
(418)
(293)
As at the year end the Group had no external borrowings, and therefore was not exposed to a material interest rate risk on borrowings.
The Group retains a proportion of the interest income generated from the pooling of customer cash balances and as a result, the Group
revenue has an indirect exposure to interest rate risk. The cash balances are held with a variety of banks and are placed in a range of fixed-term,
notice and call deposit accounts with due regard for counterparty credit risk, capacity risk, concentration risk and liquidity risk requirements.
The spread of rate retained by the Group is variable dependent on rates received by banks (disclosed to customers at between 1.15% below and
0.15% above the prevailing base rate) and amounts paid away to customers.
The impact of a 50bps increase or decrease in UK base interest rates on the Group’s revenue has been calculated and shown below. This has
been modelled on a historical basis for each year separately assuming that the UK base rate was 50bps higher or lower for the year.
2024 2023
£000 £000
+ 50 bps (0.50%)
–
–
- 50 bps (0.50%)
–
–
In FY23 and FY24, movements in the UK base interest rate would not have materially impacted the retained interest income earned by the
Group, as any increases or decreases to the UK base interest rate when it is at higher levels would be passed to customers in the form of higher
or lower pay away rates respectively.
Customer cash balances are not a financial asset of the Group and so are not included in the statement of financial position.
Market movement sensitivity
The Group’s custody fees are derived from the market value of the underlying assets held by the retail customer in their account, based on product
type, mix and portfolio size which are charged on an ad valorem basis. As a result, the Group has an indirect exposure to market risks, as the value
of the underlying customers’ assets may rise or fall. The impact on the Group’s custody fees of a 10% increase or reduction in the value of the
customers’ underlying assets has been calculated and shown below. This has been modelled on a historical basis for each year separately
assuming that the value of the customers’ assets were 10% higher or lower than the actual position at the time.
2024 2023
£000 £000
+ 10% higher
7,861
6,341
- 10% lower
(7,861)
(6,341)
Foreign exchange risk
The Group is not exposed to significant foreign exchange translation or transaction risk as the Group’s activities are primarily within the UK.
Foreign exchange risk is therefore not considered material.
Strategic report Governance Financial statements Other information
158 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 159
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
25 Financial instruments and risk management continued
Credit risk
The Group’s exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due, arises principally from
its cash balances held with banks and trade and other receivables.
Trade receivables are presented net of expected credit losses within the statement of financial position. The Group applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected
credit losses, trade receivables have been categorised based on shared credit risk characteristics and number of days past due. Details of those
trade receivables that are past due are shown within note 19.
The Group has implemented procedures that require appropriate credit or alternative checks on potential customers before business is
undertaken. This minimises credit risk in this area.
The credit and concentration risk on liquid funds, cash and cash equivalents is limited as deposits are held across a number of major banks.
The Directors continue to monitor the strength of the banks used by the Group. The principal banks currently used by the Group are Bank of
Scotland plc, Barclays Bank plc, Lloyds Bank plc, Lloyds Bank Corporate Markets plc, HSBC Bank plc, NatWest Markets plc, Santander UK plc,
Clearstream Banking SA and Qatar National Bank (Q.P.S.C). Bank of Scotland plc, the Group’s principal banker, is substantial and is 100% owned
by Lloyds Banking Group plc. All these banks currently have long-term credit ratings of at least A+ (Fitch). Where the services of other banks are
used, the Group follows a rigorous due diligence process prior to selection. This results in the Group retaining the ability to further mitigate the
counterparty risk on its own behalf and that of its customers.
The Group has no significant concentration of credit risk as exposure is spread over a large number of counterparties and customers. The
maximum exposure to credit risk is represented by the carrying amount of each financial asset at the reporting date. In relation to dealing
services, the Group operates as agent on behalf of its underlying customers and in accordance with London Stock Exchange Rules.
Any settlement risk during the period between trade date and the ultimate settlement date is substantially mitigated as a result of the Group’s
agency status, its settlement terms and the delivery versus payment mechanism whereby if a counterparty fails to make payment, the securities
would not be delivered to the counterparty. Therefore any risk exposure is to an adverse movement in market prices between the time of trade
and settlement. Conversely, if a counterparty fails to deliver securities, no payment would be made.
There has been no material change to the Group’s exposure to credit risk during the year.
Liquidity risk
This is the risk that the Group may be unable to meet its liabilities as and when they fall due. These liabilities arise from the day-to-day activities
of the Group and from its obligations to customers. The Group is a highly cash-generative business and maintains sufficient cash and standby
banking facilities to fund its foreseeable trading requirements.
There has been no change to the Group’s exposure to liquidity risk or the manner in which it manages and measures the risk during the year.
The following table shows the undiscounted cash flows relating to non-derivative financial liabilities of the Group based upon the remaining
period to the contractual maturity date at the end of the reporting period:
Due within 1 to 5 After
1 year years 5 years Total
£000 £000 £000 £000
2024
Trade and other payables
55,169
–
–
55,169
Lease liabilities
2,363
10,572
3,603
16,538
57,532
10,572
3,603
71,707
2023
Trade and other payables
46,030
–
–
46,030
Lease liabilities
2,384
8,216
5,525
16,125
48,414
8,216
5,525
62,155
Capital management
The Group’s objectives in managing capital are to:
• safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders, security for our
customers and benefits for other stakeholders;
• maintain a strong capital base to support the development of its business; and
• comply with regulatory requirements at all times.
The capital structure of the Group consists of share capital, share premium and retained earnings. As at the reporting date the Group had
capital of £203,990,000 (2023: £166,037,000).
Capital generated from the business is both reinvested in the business to generate future growth and returned to shareholders principally in the
form of dividends and share buybacks. The capital adequacy of the business is monitored on an ongoing basis and as part of the business planning
process by the Board. It is also reviewed before any distributions are made to shareholders to ensure it does not fall below the agreed surplus as
outlined in the Group’s capital management policy. The liquidity of the business is monitored by management on a daily basis to ensure sufficient
funding exists to meet the Group’s liabilities as they fall due. The Group is highly cash-generative and maintains sufficient cash and standby
banking facilities to fund its foreseeable trading requirements.
The Group conducts an annual Internal Capital and Risk Assessment (ICARA) process, as required by FCA regulation. As part of the ICARA
process, the Group determines the minimum level of capital and liquid resources that it is required to hold at all times.
The amount of resources held by the Group is reviewed and monitored against these minimum requirements on an ongoing basis; and the
minimum requirements are considered when making key business decisions. Our current financial resources, regulatory capital and liquidity
requirements can be found on page 57.
The Group maintained a surplus of regulatory capital and liquid resources throughout the year. The disclosures required under MIFIDPRU 8 of
the Investment Firms Prudential Regime are available on the Group’s website at ajbell.co.uk.
26 Interests in unconsolidated structure entities
The Group manages a number of investment funds (open-ended investments) acting as agent of the Authorised Corporate Director. The
dominant factor in deciding who controls these entities is the contractual arrangement in place between the Authorised Corporate Director
and the Group, rather than voting or similar rights. As the Group directs the investing activities through its investment management agreement
with the Authorised Corporate Director, the investment funds are deemed to be structured entities. The investment funds are not consolidated
into the Group’s financial statements as the Group is judged to act as an agent rather than having control under IFRS 10.
The purpose of the investment funds is to invest capital received from investors in a portfolio of assets in order to generate a return in the form
of capital appreciation, income from the assets, or both. The Group’s interest in the investment funds is in the form of management fees
received for its role as investment manager. These fees are variable depending on the value of the assets under management.
The funds do not have any debt or borrowings and are financed through the issue of units to investors.
The following table shows the details of unconsolidated structured entities in which the Group has an interest at the reporting date:
Management
Annual charge
Number of Net AUM of management receivable at
funds funds charge 30 September
Year
Type
£m £000 £000
2024
OEIC
9
3,698.1
5,035
496
2023
OEIC
9
2,426.6
2,859
280
The annual management charge is included within recurring ad valorem fees within revenue in the consolidated income statement.
The annual management charge receivable is included within trade and other receivables in the consolidated statement of financial position.
The maximum exposure to loss relates to a reduction in future management fees should the market value of the investment funds decrease.
Strategic report Governance Financial statements Other information
160 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 161
Notes to the consolidated financial statements continued
for the year ended 30 September 2024
27 Reconciliation of liabilities arising from financing activities
1 October Change in 30 September
2023 Cashflows lease liability 2024
2024 £000 £000 £000 £000
Lease liabilities
12,406
(1,583)
2,354
13,177
Total liabilities from financing activities
12,406
(1,583)
2,354
13,177
1 October Change in 30 September
2022 Cashflows lease liability 2023
2023 £000 £000 £000 £000
Lease liabilities
13,961
(1,576)
21
12,406
Total liabilities from financing activities
13,961
(1,576)
21
12,406
28 Related party transactions
Transactions between the Parent Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are
not disclosed.
Transactions with key management personnel
Key management personnel are represented by the Board of Directors as shown on pages 72 and 73 and the Executive Committee as shown
on page 79.
The remuneration expense of key management personnel is as follows:
2024 2023
£000 £000
Short-term employee benefits (excluding NI)
3,273
2,893
Retirement benefits
90
66
Share-based payment
2,144
1,484
5,507
4,443
During the year there were no material transactions or balances between the Group and its key management personnel or members of their
close families, other than noted below.
Transactions with Directors
The remuneration of individual Directors is provided in the Directors’ Remuneration report on pages 111 and 112.
Dividends totalling £550,000 (2023: £163,000) were paid in the year in respect of ordinary shares held by the Company’s Directors.
The aggregate gains made by the Directors on the exercise of share options during the year were £897,000 (2023: £469,000).
During the year Directors and their families received beneficial staff rates in relation to personal portfolios. The discount is not material to the
Directors or to AJ Bell.
Other related party transactions
Charitable donations
During the year the Group made donations of £439,000 to the AJ Bell Futures Foundation, a registered charity of which Mr P Birch, Mr C Musson
and Mrs E A Carrington are trustees.
EQ Property Services Limited
The Group is party to three leases with EQ Property Services Limited for rental of the Head Office premises, 4 Exchange Quay, Salford Quays,
Manchester, M5 3EE. Mr M T Summersgill and Mr R Stott are directors and shareholders of both AJ Bell plc and EQ Property Services Limited.
The leases for the rental of the building were entered into on 17 August 2016 for terms which expire on 30 September 2031, at an aggregate
market rent of £2,009,000 (2023: £2,009,000 per annum).
At the reporting date, there is £54,000 outstanding (2023: £nil) with EQ Property Services Limited.
29 Subsequent events
There have been no material events occurring between the reporting date and the date of approval of these consolidated financial statements.
Strategic report Governance Financial statements Other information
162 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 163
Company statement of financial position Company statement of changes in equity
as at 30 September 2024 for the year ended 30 September 2024
Notes
2024
£000
2023
£000
Assets
Non-current assets
Investments 6 30,797 29,437
Other receivables 8 12,794 8,973
Deferred tax asset 1,628 738
45,219 39,148
Current assets
Trade and other receivables 8 3,017 2,506
Current tax asset 1,540 1,587
Cash and cash equivalents 52,251 19,431
56,808 23,524
Total assets 102,027 62,672
Liabilities
Current liabilities
Trade and other payables 9 (1,041) (960)
Total liabilities (1,041) (960)
Net assets 100,986 61,712
Equity
Share capital 11 52 52
Share premium 8,963 8,963
Own shares (2,049) (2,377)
Retained earnings 94,020 55,074
Total equity 100,986 61,712
The financial statements were approved by the Board of Directors and authorised for issue on 4 December 2024 and signed on its behalf by:
Peter Birch
Chief Financial Officer
AJ Bell plc
Company registered number: 04503206
Share
capital
£000
Share
premium
£000
Retained
earnings
£000
Own
shares
£000
Total
equity
£000
Balance at 1 October 2023 52 8,963 55,074 (2,377) 61,712
Total comprehensive income for the year:
Profit for the year – – 85,616 – 85,616
Transactions with owners, recorded directly in equity:
Dividends paid – – (47,416) – (47,416)
Equity settled share-based payment transactions – – 567 – 567
Deferred tax effect of share-based payment transactions – – 498 – 498
Tax relief on exercise of share options – – 9 – 9
Share transfer relating to EIP – – (328) 328 –
Total transactions with owners – – (46,670) 328 (46,342)
Balance at 30 September 2024 52 8,963 94,020 (2,049) 100,986
Share
capital
£000
Share
premium
£000
Retained
earnings
£000
Own
shares
£000
Total
equity
£000
Balance at 1 October 2022 51 8,930 45,335 (473) 53,843
Total comprehensive income for the year:
Profit for the year – – 43,445 – 43,445
Transactions with owners, recorded directly in equity:
Issue of shares 1 33 – – 34
Dividends paid – – (33,294) – (33,294)
Equity settled share-based payment transactions – – (110) – (110)
Deferred tax effect of share-based payment transactions – – (88) – (88)
Tax relief on exercise of share options – – 123 – 123
Share transfer relating to EIP – – (96) 96 –
Payment of tax from employee benefit trust – – (241) – (241)
Own shares acquired – – – (2,000) (2,000)
Total transactions with owners 1 33 (33,706) (1,904) (35,576)
Balance at 30 September 2023 52 8,963 55,074 (2,377) 61,712
The notes on pages 166 to 169 form an integral part of these financial statements. The notes on pages 166 to 169 form an integral part of these financial statements.
Strategic report Governance Financial statements Other information
164 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 165
Notes to the Company financial statements
for the year ended 30 September 2024
1 General information
The principal activity of AJBell plc (the ‘Company’) is that of a holding company.
The Company is a public limited company which is listed on the London Stock Exchange and incorporated in the United Kingdom under the
Companies Act 2006 and is registered in England and Wales. The Company’s number is 04503206 and its registered office is 4 Exchange Quay,
Salford Quays, Manchester, M5 3EE.
2 Material accounting policies
Basis of accounting
The financial statements are prepared on the historical cost basis and a going concern basis in accordance with the Companies Act 2006.
These financial statements are presented in sterling, which is the currency of the primary economic environment in which the Company
operates, rounded to the nearest thousand.
The financial statements are prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
The Company has set out below where advantage of the FRS 101 disclosure exemptions have been taken. Shareholders were notified of, and
did not object to, the use of the disclosure exemptions.
Disclosure exemptions
The Company is included within the consolidated financial statements of AJBell plc, a company incorporated in the United Kingdom, whose
consolidated financial statements are publicly available. Consequently, the Company has, in compliance with FRS 101, taken advantage of the
exemption from preparing the following disclosures that would otherwise have been required under UK-adopted International Accounting
Standards:
• IAS 7 Presentation of a cash flow statement;
• IAS 8 Disclosures in respect of new standards and interpretations that have been issued but which are not yet effective;
• IAS 24 Disclosure of key management personnel compensation and the disclosure of transactions with group companies;
• IFRS 7 Disclosure in respect of financial instruments, provided that the equivalent disclosures are included in the consolidated financial
statements of the group in which the entity is consolidated;
• IFRS 13 Fair Value Measurement paragraphs 91 to 99, provided that equivalent disclosures are included within the consolidated financial
statements of the group for which the entity is consolidated; and
• IFRS 2 Share-Based Payment paragraphs 45 and 46 to 52 provided that equivalent disclosures are included within the consolidated financial
statements of the group for which the entity is consolidated.
The accounting policies adopted are the same as those set out in note 2 of the Group financial statements, which have been applied
consistently apart from the following.
Investments
Investments in subsidiary undertakings are shown at cost less provision for impairment. The Company grants share-based payments to the
employees of subsidiary companies. Each period the fair value of the employee services received by the subsidiary as a capital contribution
from the Company is reflected as an addition to investments in subsidiaries.
Financial instruments
The Company follows the accounting policy of the Group for financial instruments. In addition, the Company has balances with other group
companies. Amounts owed by group companies are financial assets and are recognised at amortised cost. Amounts owed to group companies
are financial liabilities.
Loans issued to group companies at below-market rates of interest are initially recognised at fair value, measured as the present value of loan
repayments, with the below-market element recognised as an investment in subsidiary.
3 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company’s accounting policies, which are described in note 2 of the consolidated financial statements, the Directors
are required to make judgements, estimates and assumptions to determine the carrying amounts of certain assets and liabilities. The estimates
and associated assumptions are based on the Company’s historical experience and other relevant factors. Actual results may differ from the
estimates applied.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
The following judgements have been made by the Directors in applying the Company’s policies.
Investment in subsidiaries
At each reporting date, the Company assesses whether there are any indicators of impairment in its investment in subsidiaries. If any such
indicators exist, the investments’ recoverable amount is estimated. There are a number of estimates that management use to forecast the
expected future cash flows of the investments. The estimated recoverable amount of these balances is subjective due to the inherent
uncertainty in forecasting trading conditions and cash flows used in the budgets.
Key judgements and estimates in relation to the estimated recoverable amount of this investment include:
• cash flow forecasts based on anticipated future demand for the investment’s products and services;
• budgeted future costs attributable to the supply of the investment’s products and services; and
• the level of ongoing maintenance expenditure required by the Company’s assets in order to generate the expected level of cash flows.
Any share transactions undertaken in the past 12 months are considered when assessing the fair value of the investment.
Management has identified impairment indicators for Ad Alpha Solutions Ltd, which has a carrying value of £4.8 million. Subsequently, the
Directors have performed sensitivity analysis on their projections for this subsidiary, with key assumptions being revised adversely to reflect the
potential for assets under administration to be 25% below expected levels and a 49% increase on the pre-tax discount rate applied to cash
flows. The value-in-use continued to support the carrying value of the investment with headroom of £17.6 million.
4 Profit for the year
As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own income statement for the year.
TheCompany reported a profit of £85,616,000 for the year ended 30 September 2024 (2023: £43,445,000). This profit was generated from
theCompany’s principal activity which is that of a holding company.
The auditor’s remuneration for the audit and other services is disclosed in note 6 of the consolidated financial statements.
5 Dividends
Details of dividends paid during the year are disclosed in note 11 of the consolidated financial statements.
Strategic report Governance Financial statements Other information
166 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 167
Notes to the Company financial statements continued
for the year ended 30 September 2024
6 Investments
2024
£000
2023
£000
Cost
As at 1 October 33,237 32,783
Share-based payments 522 (139)
Below-market element of loans to subsidiaries 838 593
At 30 September 34,597 33,237
Accumulated impairment losses
As at 1 October (3,800) (3,800)
Accumulated impairment losses at 30 September (3,800) (3,800)
Carrying value at 30 September 30,797 29,437
The Company has investments in the ordinary share capital of the following subsidiaries at 30 September 2024:
Proportion of ownership
interest and voting rights held
Name of subsidiary Principal activity Country of incorporation 2024 2023
AJ Bell Business Solutions Limited
1
Investment / Group administration England and Wales 100% 100%
AJ Bell Management Limited
1
Investment administration England and Wales 100% 100%
AJ Bell Securities Limited
1
Dealing and custody England and Wales 100% 100%
AJ Bell Media Limited
1
Media England and Wales 100% 100%
AJ Bell Asset Management Limited
1
Investment management services England and Wales 100% 100%
AJ Bell Touch Limited
1
Intermediate holding company England and Wales 100% 100%
Ad Alpha Solutions Limited Technology company England and Wales 100% 100%
AJ Bell EBT Limited
1
Dormant England and Wales 100% 100%
AJ Bell Digital Savings Limited
1
Dormant England and Wales 100% 100%
AJ Bell Platinum Limited
1
Dormant England and Wales 100% 100%
AJ Bell Trustees Limited Dormant England and Wales 100% 100%
AJ Bell (PP) Trustees Limited Dormant England and Wales 100% 100%
Ashby London Trustees Limited Dormant England and Wales 100% 100%
Ashby London (PP) Trustees Limited Dormant England and Wales 100% 100%
Lawshare Nominees Limited Dormant England and Wales 100% 100%
Sippdeal Limited Dormant England and Wales 100% 100%
Sippdeal Trustees Limited Dormant England and Wales 100% 100%
Whitehead Trustees Limited Dormant England and Wales 100% 100%
1. Indicates direct investment of AJ Bell plc.
The financial statements for the year ended 30 September 2024 of AJ Bell EBT Limited have been exempted from audit under s479A of the
Companies Act 2006 by way of parent guarantee from AJ Bell plc.
The registered office of all subsidiaries is 4 Exchange Quay, Salford Quays, Manchester, M5 3EE.
7 Leases
During the year the Company entered into a property lease which was subsequently novated into a Group subsidiary on 30 September 2024.
The right-of-use asset and lease liability recognised on entering the lease were disposed of on novation.
Depreciation of £104,000 and interest on lease liabilities of £51,000 has been recognised in the year.
8 Trade and other receivables
2024
£000
2023
£000
Amounts due within one year:
Amounts owed by Group undertakings 2,778 2,451
Prepayments 61 55
Accrued income 178 –
3,017 2,506
Included within amounts owed by Group undertakings is £2,451,000 (2023: £2,451,000) relating to a loan issued to AJBell Business Solutions
Limited by the Company in relation to costs incurred by AJBell Business Solutions Limited in renewing IT infrastructure and administration
systems in order to enhance products and services for the Group. The loan is interest free and repayable on demand.
2024
£000
2023
£000
Amounts due after one year:
Amounts owed by Group undertakings 12,794 8,973
12,794 8,973
Amounts owed by Group undertakings relate to loans issued to AJ Bell Touch Limited and Ad Alpha Solutions Ltd by the Company. The loan to
AJBell Touch Limited was issued to facilitate the acquisition of Ad Alpha Solutions Ltd. The loan to Ad Alpha Solutions Ltd is a working capital
arrangement issued in relation to the costs of developing the simplified mobile-focused platform proposition for financial advisers. The loans are
unsecured, interest free, and repayable on demand within 13 months’ notice.
9 Trade and other payables
2024
£000
2023
£000
Accruals 1,041 324
Amounts owed to Group undertakings – 636
1,041 960
10 Related party transactions
Transactions with key management personnel
The key management personnel of the Group and the Company are the same. The related party disclosure is given in note 28 of the
consolidated financial statements.
Transactions with Group companies
During the year the Company entered into the following transactions with its subsidiaries:
2024 2023
Receivable
£000
Payable
£000
Receivable
£000
Payable
£000
Recharges 155 592 – 595
Dividends received 86,000 – 44,000 –
86,155 592 44,000 595
The Company’s balances with fellow group companies at the reporting date are set out in notes 8 and 9 of the Company financial statements.
All transactions with fellow group companies 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.
11 Called-up share capital
The Company’s share capital is disclosed in note 23 of the consolidated financial statements.
12 Subsequent events
There have been no material events occurring between the reporting date and the date of approval of these financial statements.
Strategic report Governance Financial statements Other information
168 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 169
Low-costExpensive
Our efficient single operating model enables
us to share the benefits of scale with our
customers, providing them with one of the
most competitively-priced platforms in the
market. Across our broad investment range,
weoperate a clear, low-cost pricing structure
with no hidden charges.
I would hugely recommend AJ Bell
asacompany and I have switched
everything over to them. I use them
forDealing, SIPP, ISA and for my kids a
JISA and J-SIPP. They have a fantastic
fund range with transparent low
charges and an easy to use
(andactually useful!) app.”
Simon Wallis
AJ Bell customer
Making investing easy
Strategic report Governance Financial statements
Other information
AJ Bell plc Annual Report and Accounts 2024 171170 AJ Bell plc Annual Report and Accounts 2024
2024
£000
2023
£000
2022
£000
2021
£000
2020
£000
Results
Revenue 269,435 218,234 163,847 145,826 126,749
Profit from operations 107,278 86,220 58,981 55,851 49,236
Profit before tax 113,283 87,661 58,411 55,084 48,550
Profits attributable to equity holders of AJBell plc 84,295 68,219 46,739 43,822 38,829
Assets employed
Non-current assets 31,616 29,517 31,978 30,621 24,395
Current assets 257,265 204,805 133,504 131,521 116,945
Current liabilities (70,795) (55,254) (17,689) (15,999) (15,303)
Non-current liabilities (14,096) (13,031) (14,399) (15,435) (16,571)
Net assets 203,990 166,037 133,394 130,708 109,466
Financed by
Equity 203,990 166,037 133,394 130,708 109,466
Key statistics
Earnings per share (pence) 20.46 16.59 11.39 10.71 9.51
Fully diluted earnings per share (pence) 20.34 16.53 11.35 10.67 9.47
Ordinary dividend per share paid in year (pence) 11.50 8.09 7.28 7.12 4.83
Special dividend per share paid in year (pence) – – 5.00 – –
Ordinary dividend per share declared with respect to profits
generated in year (pence) 8.25 10.75 7.37 6.96 6.16
Special dividend per share declared with respect to profits
generated in year (pence) – – – 5.00 –
Adalpha
AJBell Touch Limited and its wholly-owned subsidiaries
AGM
Annual General Meeting
AI
Artificial Intelligence
AJBIC
AJBell Investcentre
APM
Alternative Performance Measures
AQR
Audit Quality Review
BAYE
Buy As You Earn
Board,
Directors
The Board of Directors of AJBell plc
BPP
Business Planning Process
BPS
Basis points
BVCM
Beyond Value Chain Mitigation
CAM
Combined Assurance Model
CASS
Client Assets Sourcebook
CBT
Computer-Based Training
CCP
Core Carbon Principles
CDP
Carbon Disclosure Project
CGU
Cash Generating Unit
CMI
Chartered Management Institute
CODM
Chief Operating Decision Maker
CSOP
Company Share Option Plan
CSR
Corporate Social Responsibility
D2C
Direct to Consumer
DC
Defined Contribution
DE&I
Diversity, Equality and Inclusion
DEFRA
Department for Environment, Food & Rural Affairs
DEPS
Diluted Earnings Per Share
DOT
Diversity of Thought
DPO
Data Protection Officer
DTR
Disclosure Guidance and Transparency Rules
DWP
Department for Work and Pensions
EIP
Executive Incentive Plan
EPC
Energy Performance Certificate
EPS
Earnings Per Share
ERC
Executive Risk Committee
ESG
Environmental, Social and Governance
ETF
Exchange Traded Fund
EVF
Employee Voice Forum
EVIC
Enterprise Value Including Cash
ExCo
Executive Committee (formerly EMB)
F&SS
Funds & Shares Service
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
FRS
Financial Reporting Standards
FTE
Full Time Equivalent
FTSE
The Financial Times Stock Exchange
FX
Foreign Exchange
GHG
Greenhouse Gas
GPTW
Great Place to Work
HMRC
His Majesty's Revenue and Customs
HR
Human Resources
IAS
International Accounting Standards
ICARA
Internal Capital and Risk Assessment
ICO
Information Commissioner’s Office
ICVCM
Integrity Council for the Voluntary Carbon Market
IFRIC
International Financial Reporting Interpretations Committee
IFRS
International Financial Reporting Standards
IHT
Inheritance tax
IPO
Initial Public Offering
ISA
Individual Savings Account
ISO
International Organisation for Standardisation
ISSB
International Sustainability Standards Board
IT
Information Technology
KOS
Key Operating System
KPI
Key Performance Indicator
KRI
Key Risk Indicator
LISA
Lifetime ISA
MEES
Minimum Energy Efficiency Standard
MiFID
Markets in Financial Instruments Directive
MIFIDPRU
Prudential Sourcebook for MiFID Investment Firms
MLRO
Money Laundering Reporting Officer
MPS
Managed Portfolio Service
MSCI
Morgan Stanley Capital International
NCO
Nil Cost Options
NGFS
Network for Greening the Financial System
OCF
Ongoing Charges Figure
OEIC
Open-Ended Investment Company
OTB
Option To Buy
PBT
Profit Before Tax
PCAF
Partnership for Carbon Accounting Financials
PLC
Public Limited Company
PR&U
Principal Risks and Uncertainties
PRI
Principles of Responsible Investment
R&CC
Risk & Compliance Committee
RCSA
Risk and Control Self-Assessment
REGO
Renewable Energy Guarantees of Origin
RMF
Risk Management Framework
SASB
Sustainability Accounting Standards Board
SBTi
Science Based Targets initiative
SDR
Sustainability Disclosure Requirements
SID
Senior Independent Director
SIPP
Self-Invested Personal Pension
SME
Subject Matter Experts
SMF
Senior Manager Function
SMIP
Senior Management Incentive Plan
SRI
Socially Responsible Index
TCFD
Task Force on Climate-related Financial Disclosures
TSR
Total Shareholder Return
UN SDG
United Nations Sustainable Development Goals
WACI
Weighted Average Carbon Intensity
WRAP
Worldwide Responsible Accredited Production
WTT
Well-To-Tank
Consolidated unaudited five-year summary Glossary
for the year ended 30 September 2024
Strategic report Governance Financial statements Other information
172 AJ Bell plc Annual Report and Accounts 2024 AJ Bell plc Annual Report and Accounts 2024 173
Ad valorem
According to value
AUA
Assets Under Administration
AUM
Asset Under Management
Customer
retention rate
The customer retention rate is the average
number of funded platform customers during
the financial year that remain funded at the year
end
Lifetime value
The total amount of revenue a business expects
to generate over the lifetime of a customer
Listing rules
Regulations subject to the oversight of the FCA
applicable to companies listed on a UK stock
exchange
MSCI ESG
rating
MSCI’s assessment of a Company’s resilience to
long-term, industry material ESG risks and how
well they manage those risks relative to peers
Own shares
Shares held by the Group to satisfy future
incentive plans
Platforum
The advisory and research business specialising
in investment platforms
Recurring ad
valorem
revenue
Includes custody fees, retained interest income
and investment management fees
Recurring
fixedrevenue
Includes recurring pension administration fees
and media revenue
Revenue per
£AUA
Represents revenue as a percentage of
theaverage AUA in the year. Average AUA is
calculated as the average of the opening and
closing AUA in each quarter averaged for the year
Transactional
revenue
Includes dealing fees and pension scheme
activity fees
UK Corporate
Governance
Code
A code which sets out standards for best
boardroom practice with a focus on Board
leadership and effectiveness, remuneration,
accountability and relations with shareholders
UN SDGs target definitions
3.8
Achieve universal health coverage, including
financial risk protection, access to quality
essential health-care services and access to safe,
effective, quality and affordable essential
medicines and vaccines for all.
4.4
By 2030, substantially increase the number
ofyouths and adults who have relevant skills,
including technical and vocational skills, for
employment, decent jobs and entrepreneurship.
5.5
Ensure women’s full and effective participation
and equal opportunities for leadership at all
levels of decision making in political, economic
and public life.
10.2
By 2030, empower and promote the social,
economic and political inclusion of all, irrespective
of age, sex, disability, race, ethnicity, origin, religion
or economic or other status.
13.2
Integrate climate change measures into national
policies, strategies and planning.
Definitions Company information
Company number
04503206
Company Secretary
Kina Sinclair
Registered office
4 Exchange Quay
Salford Quays
Manchester
M5 3EE
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Banker
Bank of Scotland plc
The Mound
Edinburgh
EH1 1YZ
This report is printed on paper certified in accordance with the FSC® (Forest Stewardship Council®)
andisrecyclable and acid-free.
Pureprint Ltd is FSC certified and ISO 14001 certified showing that it is committed to all round
excellence and improving environmental performance is an important part of this strategy.
Pureprint Ltd aims to reduce at source the effect its operations have on the environment and
iscommitted to continual improvement, prevention of pollution and compliance with any
legislationorindustry standards.
Pureprint Ltd is a Carbon / Neutral® Printing Company.
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174 AJ Bell plc Annual Report and Accounts 2024
AJ Bell plc
4 Exchange Quay
Salford Quays
Manchester M5 3EE
T: 0345 40 89 100
ajbell.co.uk
Company registration number 04503206