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  • C h

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    Towards holistic wealth management Annual report and accounts 2019

  • charles-stanley.co.uk

    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

    Strategic report

    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

    Governance

    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

    Financial statements

    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

    155 Glossary

    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

    Divisional revenue

    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)

    Asset Management

    £7.4m (2018: £7.0m)

    Financial Planning

    £7.3m (2018: £6.3m)

    Financial highlights

    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)

    20 17

    20 18

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    8.8

    12.35

    11.4

    17.23

    11.0 11.6

    17.74

    7.1

    8.8 9.2

    6.0

    8.0 8.75

    5.0

    8.5 8.2

    24.0 23.8 24.1

    11.4 12.3

    13.1

    9.8

    10.9

  • Charles Stanley Annual report and accounts 201902

    Our business

    Our business

    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:

    Boring Money:

    Best Buy Award – Charles Stanley Direct

    Asset Risk Consultants 3D Award:

    Charles Stanley

    Investors’ Chronicle/FT Investment and Wealth Management Awards:

    Best Wealth Manager for Inheritance Tax and Succession Planning

    Focusing on you

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    rles Stanley Direct

    In

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    Services Asset M anagem

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    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.

    Financial Planning

    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

    Services division.

    14 Turn to page 14 to find out more about our operating divisions

    Ho lis

    tic Weal

    th Management

  • Charles Stanley Annual report and accounts 2019charles-stanley.co.uk 03

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    Our markets

    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.

    Our markets

    Overview Weaker global economic growth, rising trade tensions between the US and China, and

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