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Towards holistic wealth management Annual report and accounts 2019
Who we are Charles Stanley traces its origins back to 1792 and is one of the oldest firms on the London Stock Exchange. We provide holistic wealth management services to private clients, charities, trusts and institutions. These are delivered by 400 professionals located in 25 offices throughout the UK, both direct to clients and to intermediaries.
Our values Charles Stanley’s core values – Caring, Fair and Progressive – have provided an overarching framework within which we operate, supporting our underlying strategy to always work in our clients’ best interests and offer a truly personal service. Our purpose Our PURPOSE is to build on our long history, traditional values and strong reputation to help our clients prosper.
Our FOCUS to achieve our PURPOSE is to strive towards excellence:
• by meeting our clients’ goals through the highest standards of holistic wealth and investment management services
• with the passion by which we build long-term personal relationships between our staff and our clients
• by working collaboratively, encouraging and supporting our valued staff to build skills and careers
• by committing to add value to all our stakeholders in contributing to our local communities.
Our vision is to become the UK’s leading wealth manager.
We define leading in terms of quality rather than quantity. Focusing on client satisfaction as well as staff engagement and equity market rating, we measure our progress against these targets year-on-year.
01 At a glance
02 Our business
03 Our markets
04 Chairman’s statement
06 Chief Executive Officer’s report
08 Where we are going
09 Strategic measures
10 What we are working towards
12 The focus for the year
14 Executing the strategy
16 Key performance indicators
18 Review of the year
34 Risk management and principal risks
39 Viability statement
40 Corporate social responsibility report
46 Governance introduction
48 Board of Directors
50 Executive Committee
52 Corporate governance report
56 Audit Committee report
60 Nomination Committee report
62 Directors’ remuneration report
80 Risk Committee report
84 Directors’ report
88 Directors’ responsibilities
89 Independent auditor’s report to the members of Charles Stanley Group PLC
97 Consolidated income statement
98 Consolidated statement of comprehensive income
99 Consolidated statement of financial position
100 Consolidated statement of changes in equity
102 Consolidated statement of cash flows
103 Notes to the financial statements
147 Parent Company financial statements
150 Notes to the Parent Company financial statements
154 Unaudited five year record
IBC Company information
IBC Financial calendar
IBC Where we are
Charles Stanley Annual report and accounts 2019charles-stanley.co.uk 01
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At a glance
Investment Management Services
£132.8m (2018: £131.2m)
Charles Stanley Direct
£7.7m (2018: £5.9m)
Group Core Business1 revenue
£155.2m (2018: £150.4m)
£7.4m (2018: £7.0m)
£7.3m (2018: £6.3m)
Group highlights – Further growth in Discretionary funds, up 6.5% – Higher revenues across all divisions with Financial Planning and Charles Stanley Direct
continuing to build scale – FY 2019 dividend increased by 9.4% to 8.75 pence per share – 12.0% increase in Group’s regulatory capital resources – FY 2020 focus on simplification and standardisation of structures and processes
to deliver an integrated business model and seamless customer proposition
1. The Core Business figures represent the results of the Group’s main operating divisions (see page 21), excluding held
for sale activities and adjusting items which are listed out on page 24.
2. This represents the Core Business profit as defined in note 1 above and excluding the charge in respect of non-cash
share options awarded to certain investment management teams under revised remuneration arrangements settled
in 2017, expressed as a percentage of Core Business revenues (see page 21).
3. Return on capital employed represents reported operating profit as shown on page 97 divided by capital employed
(total assets less current liabilities) as shown on page 99.
Reported profit before tax (£m)
Core Business profit before tax (£m)1
Reported basic earnings per share (p)
Core Business pre-tax profit margin (%)2
Dividend per share (p)
Return on capital employed (%)3
FuMA (£bn)Discretionary funds (£bn)
24.0 23.8 24.1
Charles Stanley Annual report and accounts 201902
What we do Charles Stanley offers a genuinely personal service across the full range of wealth management services, which has led to high levels of trust and client satisfaction scores of 87% for FY 2019.
We provide these services in three forms: the time we take to interact with clients, our investment insights and our willingness to make investment decisions on clients’ behalf.
Our commitment to holistic wealth management is delivered through four core offerings: Investment Management Services, Asset Management, Financial Planning and Charles Stanley Direct.
Our divisions each have the capacity to grow revenues in their respective markets. Together they offer a set of complementary services which support our ambition to become the UK’s leading wealth manager.
Recent awards received:
Best Buy Award – Charles Stanley Direct
Asset Risk Consultants 3D Award:
Investors’ Chronicle/FT Investment and Wealth Management Awards:
Best Wealth Manager for Inheritance Tax and Succession Planning
Focusing on you
rles Stanley Direct
Services Asset M anagem
Personal Approa ch
Fu ll Se
rvice Offer Asset Management
Provides a range of pooled funds and bespoke solutions, including model portfolios, open-ended investment company (OEIC) funds and Inheritance Tax solutions. Clients include financial advisers, defined benefit pension schemes, institutional investors and high net worth individuals.
Investment Management Services
Offering personal Discretionary, Advisory and Execution-only services to private clients, trusts, charities and companies. Our premium and bespoke service creates deep relationships with clients, typically generating reliable revenue yields.
Charles Stanley Direct
Our award-winning digital Execution-only platform enables self-directed investors who choose to manage their own money to utilise our dealing, settlement and custody services, covering a wide range of funds, shares, gilts and bonds.
Our experienced financial planners provide advice to help our clients plan and structure their wealth. As the savings, pensions and inheritance tax landscape becomes ever more complex, they provide a range of personalised solutions working in partnership with our Investment Management
14 Turn to page 14 to find out more about our operating divisions
Charles Stanley Annual report and accounts 2019charles-stanley.co.uk 03
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The UK wealth management industry has been subject to ongoing macroeconomic and political uncertainty. Against this backdrop, and disappointing investment returns in the second half of calendar 2018, investors have remained nervous and reluctant to commit new money to markets.
Overview Weaker global economic growth, rising trade tensions between the US and China, and