Rathbones Group H1 2025 Earnings Report

Rathbones Group EPS Results

• Actual EPS: GBX 75.60
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Rathbones Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Rathbones Group Announcement Details

• Quarter: H1 2025
• Date: 7/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 5:00AM ET

Rathbones is a leading provider of individual Wealth Management, Asset Management and related services to Private Clients, Charities, Trustees and Professional Partners. We have been trusted for generations to manage and preserve our clients' wealth. Our tradition of thinking, acting and investing for everyone’s tomorrow has been with us from the beginning and continues to lead us forward. Rathbones headquarters is 30 Gresham Street, London, EC2V 7QN. www.rathbones.com

Rathbones Group H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Completed the planned migration of Investec Wealth and Investment clients onto Rathbones’ platform and strengthened the leadership team with the appointment of a new Group CEO designate and CEO of Rathbones Wealth.
• Positive Sentiment: Funds under management and administration remained stable at £109 bn and operating income rose to £149.1 m, reflecting resilience in market recovery and revenue synergies.
• Negative Sentiment: Underlying profit before tax was down by £4.4 m year-on-year due to temporary integration costs, salary inflation, higher National Insurance rates and FSCS levies.
• Positive Sentiment: The Board announced a proposed £50 m share buyback, its first ever, signalling confidence in Rathbones’ business model and future prospects.
• Positive Sentiment: Delivered £47.2 m of annualized synergies on track for the £60 m target by end-2025, underpinning guidance for a 28 % margin in 2026 and 30 % long-term.

Presentation

[Clive Bannister, Chair at Rathbones Group]

Good morning, and a very warm welcome to Rathbone's twenty twenty five first half results. I hope you enjoyed the video. Invest well, live well, Rathbone's at its best. Thank you, Simonetta. And thank you to everybody who is joining us in person here today and for those who are online.

[Clive Bannister, Chair at Rathbones Group]

We are recording today's presentation, so if I could politely ask you and remind everybody who's physically with us to switch off the phone, I would be most grateful. Put them on silent. For those who do not know me, my name is Clive Bannister, and I have the honor to Chair Rathbone's plc. And I'm joined here today by our Chief Executive, Paul Stockton our Chief Financial Officer, Ian Hooley and our CEO designate, Jonathan Sorrell, awaiting formal approval from our regulators confidently awaiting approval from our regulators. John is currently working closely with us and the team to before formally stepping into the role at the September.

[Clive Bannister, Chair at Rathbones Group]

So what is today's format? We will start with a financial update from Ian, who will take us through the results for the 2025. Paul will then give us an update on integration and share his perspective on how the business is positioned for our next chapter of growth. Following that, John will share his initial impressions as he continues to get to know the organization and his new colleagues. And then we will open up to Q and A, and we will close the session with some personal reflections from Paul as he prepares to hand over leadership.

[Clive Bannister, Chair at Rathbones Group]

Before I hand over to Iain, I would like to take a moment to reflect on what has been a significant and productive first half for the group. Most importantly, we have completed the planned migration of Investec Wealth and Investment Clients and all of their assets, a major milestone in our integration journey. At the same time, we strengthened our leadership team, appointing John as our incoming group CEO and Camilla Stowell as CEO of Rathbones Wealth. Camilla joins us. Hand up.

[Clive Bannister, Chair at Rathbones Group]

Camilla joins us, thank you, from Coutts, and is here with us today. We also refined our capital allocation framework to ensure that it aligns with our long term ambitions. And with that, have today announced a proposed share buyback of £50,000,000 the first in Rathbone's February history. This advertises the Board's confidence in Rathbone's business model, our future business prospects and serves as a thank you to you, our shareholders. With that, I will now hand over to Iain to take us through the numbers.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Thank you, Clive. Good morning, everyone. I'm going to cover three main areas. So first of all, I will run through the overview of the results for the 2025. I'll then cover the figures relevant to the IDB and I integration under our capital position.

[Iain Hooley, Group CFO & Director at Rathbones Group]

And I'll then conclude with our expectations for the second half of the year. So to begin, we'll look at the financial highlights of the 2025. Funds Under Management and Administration, or FUMA, remained consistent with both the prior half year and the opening position for 2025 at £109,000,000,000 That reflects a recovery from the position at the end of the first quarter when funds under management and administration stood at £104,100,000,000 some 5% lower than at the start of the year as asset values fell following the announcement of U. S. Trade tariffs on what was named Liberation Day.

[Iain Hooley, Group CFO & Director at Rathbones Group]

That low point coincided with the first quarterly billing of investment management fees, which took place on the March 31 and the April 4 and consequently had an adverse impact on the overall level of fee income for the first quarter. Despite that, our income operating income has shown resilience increasing to 4 and £49,100,000 for the first half. That increase in operating income reflects higher income in the Asset Management segment, which calculates its revenue on a daily basis, along with the benefits of revenue synergies relating to the integration of Investec Wealth Investment or IWNI, which started to be fully realized following the client migration in the second quarter. Underlying profit before tax reduced by £4,400,000 relative to the prior period. The reduction reflects the impact of certain temporary and longer term cost factors, which I'll come on to shortly.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Looking now at PBT on a statutory basis, the same factors that have impacted underlying PBT are relevant here as well. Status for PBT is stated after amortization of intangible assets and the short term costs of integration consistent with prior years. Underlying earnings per share reflects a reduction in underlying earnings. And the interim dividend we have announced today reflects our progressive dividend policy with a 1p increase to 31p per share. Underlying PBT, looking now at that, I would like to now just set out fully the movement in underlying profit before tax and margin for the twenty twenty five first half of the year relative to that for the twenty twenty four half year.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Each element of the movement is shown on the waterfall. The continuing delivery of synergies has, of course, benefited underlying performance the underlying performance we have reported. The benefit of synergy to the twenty twenty five half year results is £12,000,000 higher than it was for the prior period. Variable staff costs largely reflect performance, but this positive impact on costs has been offset by salary inflation, 3% increase for 2025, alongside previously signposted increases in the rates of National Insurance contributions and higher FSCS levies. Temporary cost increases in the first half amounted to £5,200,000 including the one off effect of transitioning to the arrangement with Investec Bank to outsource specific technology services, which will deliver future synergy benefits.

[Iain Hooley, Group CFO & Director at Rathbones Group]

We'll now look at FUMA and flows for the first half. Overall, FUMA remained consistent with the 2024 closing position at GBP 109,000,000,000, having increased by circa 5% since the low point at the end of the first quarter, reflecting the recovery in the markets. Gross inflows of £5,200,000,000 remained solid, representing 9.5% of opening FUMA on an annualized basis. Gross inflows were lower than the prior period as a result of the need for investment management teams to focus on the final stages of the client migration process and subsequently adapting to new systems, which has temporarily impacted new business activity. Net outflows, including those relating to the asset management include those relating to the asset management segment with single strategy funds continuing to be affected by the factors relevant to the wider asset management industry backdrop.

[Iain Hooley, Group CFO & Director at Rathbones Group]

However, whilst we reported net outflows for the half year overall, the net flows position improved markedly in the second quarter with net outflows reducing to £200,000,000 from £800,000,000 in the first quarter, driven by a significant reduction in gross outflows. Reflecting this improvement, the Wealth Management segment reported neutral net flows for the second quarter. This is consistent with our expectation that the factors that have elevated gross outflows are now showing signs of receding. We'll now look at income for the group, which remained resilient despite the adverse impact of market volatility. Wealth management fees were broadly flat overall, reflecting the recovery in FUMA following the low points at the end of the first quarter.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Asset management fees benefited from higher average fund values. Commission income saw some reduction in transaction volumes due to a flatter seasonal spike around the end of the tax year consistent with our previous guidance. Interest income increased as a result of the migration of iGBNI client money balances onto the Rathbones banking model with a corresponding reduction in other income. The increase in interest income also reflects the realization of synergies. A significant portion of advice fees are charged on an ad valorem basis and hence were impacted by the market volatility in the first quarter.

[Iain Hooley, Group CFO & Director at Rathbones Group]

We continue to expect to see future growth in income driven by advice as the structural need for advice continues to drive demand and our capacity to deliver advice remains strong following the Sonnes and House and IDB and I integrations. The other income line includes £9,300,000 of IDB I's client interest margin up to the point IDB and I clients migrated onto the Rathbose platform. We'll now look at our income margins. Income margins remain resilient with both fee and commission margins for the Wealth Management segment increasing relative to their prior year levels. The asset management fee income margin has shown some decrease as a result of the mix of funds continuing the shift towards lower margin multi asset funds.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Our treasury income yield, which is based on the total value of the group's liquidity, increased from two twenty five basis points for the full year 2024 as a result of the changes in the mix of deposits and the benefits of our treasury strategy, which defers the full impact of rate reductions on interest receivable. Turning now to synergy delivery in relation to the integration of the IDB and I business. Synergies delivered at the 06/30/2025 amount to £47,200,000 on an annualized run rate basis. Synergy delivery since the December 31 mostly reflects revenue synergies, which includes a higher interest margin driven by the Rathbose banking model and technology costs where the transition to the outsourcing arrangement with Investec Bank is now delivering cost savings on a run rate basis. The delivery of these synergies has arisen towards the end of the first half, thereby having a relatively limited benefit within the six month period.

[Iain Hooley, Group CFO & Director at Rathbones Group]

We expect to deliver our full synergy target of £60,000,000 by the 2025, well ahead of the time frame we set out at completion of the combination. We'll now look at those costs which are recognized as nonunderlying costs. The categories of costs which are recognized as nonunderlying remains consistent with prior periods. Costs relating to the amortization of intangible assets reflects the normal ongoing run rate that we'll continue to see going forward. IDB and I integration costs will mostly have been incurred by the 2025, with much lower costs in 2026 being the residue relating to employee incentive awards, which are being spread over the vesting period.

[Iain Hooley, Group CFO & Director at Rathbones Group]

The effective tax rate for the period reduced to 28.7%, reflecting a normalization of the rate following the effect of nonrecurring disallowable integration costs in the prior period, consistent with our previous guidance. Moving now on to capital. We said in February that we were reviewing our capital position. As a result, and as Clive referred to earlier, we have today announced a share buyback program of £50,000,000 which will be the first that Rothbones has undertaken. The proposed buyback is subject to regulatory approval and is likely to commence in September.

[Iain Hooley, Group CFO & Director at Rathbones Group]

As a result of the buyback, Investec's voting and economic interest will be at or below those that applied at completion of the IDBI transaction. Our balance sheet remains very strong after allowing for the buyback. The value of GBP 50,000,000 reflects our preference for completion of the program in a time frame that takes into account the liquidity of our shares and the close link of the Rathbone share price with investment markets. We also referenced in February that we would establish a capital allocation framework for the combined group to set out our approach and discipline to how we will deploy capital going forward. The framework we have established comprises five capital allocation priorities on this which are on the slide, which are to maintain a strong balance sheet and regulatory capital base to underpin the group's financial strength, balancing a robust position with efficiency to retain an appropriate level of capital to invest in our strategic priorities that will drive future growth to maintain our policy of regular progressive dividends underpinned by earnings growth to retain capital to enable us to invest in inorganic growth opportunities of an appropriate size where they present the right level of return and strategic fit.

[Iain Hooley, Group CFO & Director at Rathbones Group]

And to the extent our capital base exceeds that required to meet these needs, we will retain the flexibility to return excess capital to shareholders. The group remains highly cash and capital generative, and this will increase as we move out of the integration phase and look towards benefiting fully from synergies with the cost of integration reducing significantly after the end of this year. So looking forward and to recap on the matters I've covered that are related to our future performance. With regards to income and net interest margin, we continue to see improvement in the outlook for net flows as the factors we have that have elevated gross outflows continue to recede and the business moves out of the integration phase. The opportunity to grow revenues as a result of providing greater levels of advice remains as the need for advice continues to grow and we have an established capacity to deliver it.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Commission income is expected to show the normal seasonality, being lower in the second half relative to the first half. Our net interest margin for 2025 is expected to remain consistent with the half year level. Further reductions in Central Bank interest rates will result in some modest reduction in the net interest margin as we look further forward, with the downward pressure increasing once The U. K. Base rate falls below 4%, being the point at which we expect to absorb a greater proportion of rate reductions.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Fee income would, of course, benefit from any positive market reaction to interest rates reductions materializing. With regards to costs and synergies, as I said earlier, we expect to achieve our £60,000,000 synergy target ahead of schedule by the 2025. The benefit to the second half of the additional synergy delivery will be tempered by some cost headwinds as on the effect of the 2025 salary reviews. With regards to our underlying margin for 2025, our guidance at the 2024 year end was that improvements in the underlying operating margin will be weighted towards 2026 given the timing of synergy delivery and expectations of the delivery of future growth. Following the first quarter billing taking place at a relative low point for asset values and the factors I've just set out relating to costs, we expect the underlying margin for the full 2025 year to be broadly consistent with the 2024 full year margin, which was 25.4%.

[Iain Hooley, Group CFO & Director at Rathbones Group]

That reflects an improved margin in the second half relative to the first half, being the net effect of all the factors I've set out, which included the delivery of the remaining synergy benefits. Our guidance regarding the our 30% margin target remains consistent, meaning that the delivery of the remaining synergies and our ongoing cost discipline is expected to result in a 28% margin by the 2026, with the delivery of the remaining 2% to take us to 30% dependent upon growth in FUMA and Advice revenues. And with that, I'll hand over to you, Paul.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Ian, thank you very much, and good morning to you all. As Clive mentioned earlier, it's been a pretty busy first half for Rathbones as we've been balancing both operational integration and, of course, continuing to respond to market conditions that seem to be ever changing as well as positioning the business for the future. So let me talk a little bit about how that client migration progressed, but then a little bit more about how we're positioning the business for the future. So it would be no surprise to anybody in this room to know that when you put two significant businesses together operationally, it's obviously going to involve a huge amount of hard work. So we are very pleased, as Clive mentioned earlier, to be able to report that the migration of client accounts from Investec Wealth onto the Rathbone platform is now complete.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

The migration itself was completed in two tranches, and it really marks a milestone post the combination, enabling us now to press ahead with the next phase, as Ian mentioned, of synergy realization over the next six months and getting the business back onto full focus of the of growth. So there are two real important opportunities. We have an opportunity now that we have one platform to work on improvements to streamline processes and make efficiencies that better enable client facing teams. And secondly, an opportunity to harness the great amount of client feedback we've gotten over the last six to nine months to improve the overall client experience and as well our internal process. So clearly, there's also the prospect of a much greater environment where there's less distraction from internal things and much more focus on externally external factors that are impacting the business.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So very reassuring that inside of Rathbones, terms like integration and migration are now dwindling and being used much less frequently, which demonstrates that the business itself is moving very much on as we focus on improvement and growth in the future. So in February, I talked a lot about the real exciting opportunity we do see for the Enlarge Group to lead The UK wealth management and financial advice sector, fueled, of course, by the ongoing rise in UK household wealth, which is already estimated at around GBP 2,400,000,000,000.0, but rising to around GBP 2,900,000,000,000.0 within a five year period. And we are now one of the key firms in the sector and well positioned to take advantage of this rising demand for investment and advice services. More people are, of course, approaching retirement with money and assets and looking for a personalized service that we are increasingly seeing supported by a regulatory environment that is trying to support growth. So Rathbans is now a business with a full range of services to support people across a wide spectrum of assets and needs delivered, of course, through 22 offices around The UK, two offices offshore in The Channel Islands.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We also have dedicated specialists in charities, Green Bank, Quarter Protection and for higher net worth individuals, an expanding private office that gives us breadth and depth. The market, however, is changing rapidly. So alongside our extensive migration work, we've been progressing a number of new propositions that will be launched in the near term. And as we hope from you can see from this slide, these propositions are focused on our three main channels. For direct private clients, we're aligning our services much more closely with financial life stages, leveraging key components of our investment process to enhance the way in which we deliver our advice and investment management services.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We're also teaming up with the National Philanthropic Trust UK to offer a bespoke and select donor advised fund option to clients wishing to make a philanthropic contribution. With over three quarters of U. K. Advisers reporting an increased appetite for tailored solutions, we're excited to have just announced a truly active model portfolio service range that offers a suite of seven MPS portfolios, including three in house funds launched exclusively for this purpose. This is the first indication that we can combine the strength of both Rathbones and Investec Wealth to make a market impact.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And this product will be available on 14 adviser platforms in the autumn. Rathbone Asset Management itself has recently received approvals from for emerging markets and Asian equity funds, adding to our already recognized range of funds, which of course have and include newly classified responsible investment fund options too. RAM itself is also looking to widen distribution to wealth managers and leverage its capability in the segregated mandate market. We're also launching our first charity authorized investment fund in October, which is a much more scalable offering tailored to an ever changing charity market too. It will very much complement what we have at Greenbank, and that's a leading sustainable investment expertise that is much treasured in the organization.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We continue to work, of course, very closely with Investec Bank to ensure that our services are delivered very much alongside theirs by a Rathbone's team dedicated to building contacts and servicing the relationships. So Jonathan and I have already spent a good amount of time together and talked a lot about how to characterize the next six months of this year. We've characterized it as a period of optimization. Client facing teams have managed through a pretty intensive period of change recently, so more business as usual in the second half will very much be welcome. And in the eighteen months prior to any migration, let alone one of the size that we have just completed, it's inevitable there will be less focus on efficiency and process improvement as Ian touched on.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We'll be very much remedying this over the coming months, taking advantage of what is a unique opportunity to build more momentum in these areas and, of course, embed best practices from both organizations. We're forming a dedicated data and analytics function and that will explore how we can best leverage what is now a considerable amount of data we hold, which will build on the deployment of Microsoft AI and robotic processing tools that are already improving efficiency and enabling us to enhance client service delivery. As I mentioned earlier, we'll also continue to develop MyRathbones, having received some excellent and very constructive feedback from advisers and clients during the migration. Ian has talked about our synergy progress, so let me not forget that and double down on that. It's really important to us that we achieve what we promised, and we will be supporting all of the operational activities that support the delivery of those synergies very strongly in the second half.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Also, there's a culture in the organization that is always brought in when we welcome the new skills and expertise that both Jonathan, our new CIO, and Camilla, our new CEO of Wealth, will bring into the organization. We very much look forward to leveraging the skills that they will both bring to the organization. So to summarize, having completed a client migration, we've very much turned to business as usual. Optimization is the message both for our capital, as you've heard from Ian, and our newly integrated business as we look forward to a second half where we can make a material difference to both. There are some exciting propositions that I hope will demonstrate that the last year or so is not just about bringing two businesses together, but also having a keen eye on the future direction of the business.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We're continuing to invest in marketing and distribution and can now evolve our technology infrastructure further to fully adopt the best solutions from both firms to better support our people and clients. Now my focus over the near term is to ensure that the transition of my responsibilities is smooth and efficient, and I very much look forward to doing that with both John and Camilla as they get their feet underneath the table. Clive, that's all for now, as they say. I'll hand back to you.

[Clive Bannister, Chair at Rathbones Group]

Thank you very much indeed. Before I hand over to John for his first impressions, I'd like to take a few moments to formally introduce him. John joined us on the July 1. And in the short time that he's been with us, it is clear already that he brings the right blend of experience, drive, thoughtfulness for the next phase of Rathbone's evolution. He has a strong background with a career that has spanned roles at Goldman Sachs, Mann Group plc and Capstone Investment Advisors.

[Clive Bannister, Chair at Rathbones Group]

Sparing your blushes, he is ambitious, possesses high integrity, core to the DNA of Rathbones, is deeply focused on growth and clients, qualities that the Board believe make him exceptionally well placed to lead Rathbones in its next chapter. John, over to you.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

Thank you, Clive. Good morning, everyone. It's been a real pleasure actually over the last few weeks starting at Rathbones to get to know so many colleagues around the firm and also the opportunity to meet clients as well. I've actually been really struck. We've got some brilliant people around this business in terms of the quality of the people we have facing clients, the technical expertise that we have in the business.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

But I come from a couple of firms that really pride themselves on caring for clients. And I think if there's one thing that struck me here is this is a whole new level of care and attention that people show towards clients and also for that matter towards one another in the business. I want to thank Ian in particular for helping me to get up to speed so quickly. I think he's been impressively patient actually as I've asked him endless questions, bit like a toddler, why, why, why. Impressively patient because he's had today to prepare for as well.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

So thank you to Ian. Camilla in the front row is new to the business as well. Rather depressingly, actually, you wouldn't really know it. So I feel like a newbie. Camilla is actually she's been here for the last thirty five years.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

But we've gelled really well together as a team, and I'm really looking forward to working with Camilla and Ian and the rest of the team in the months and years ahead. As I said, the one thing that struck me coming from really client centric organizations is how much care there is for clients across the firm. And you can feel this in the way that people talk about their client relationships, the decisions that they take, the pride that they take in getting things right. So notwithstanding, as Paul said, some of the work that we have to do, I think that's a really strong foundation actually to build on the opportunities that we have and do what we want to do here. So I personally joined Rathbones because I see a big opportunity.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

That opportunity is to build the best wealth manager in The U. K. That's the belief that brought me here. And for what it's worth since taking this opportunity, that level of conviction that I have and the opportunity has grown really exponentially as I meet people within the business. And that's convinced me really that we're only at the foothills of realizing the potential that we have here.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

I see that we have a really amazing set of cards to play. We have the scale now following the merger with Investec, the resources to invest properly in our proposition to clients. We have a strong and trusted brand. And as I mentioned, a team that are super experienced care deeply about their clients, and there's a huge amount of technical competence around the business. Those attributes, together with some of the macro trends that Paul alluded to, whether that's demographic or regulatory or societal, that gives us a really good tailwind and strengthens the case.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

And I'm very excited about the relationship we have with Investec. It's a privilege to do a job like this when you have a stable long term shareholder. And I am particularly excited in Camilla as well by the opportunity to collaborate more with Investec on the client side. I think there's a decent amount of upside there. I'm very excited.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

I, back in the day, worked with Investec a long time ago, always enjoyed it and enjoying it again. Becoming the best wealth manager in The U. K. For me essentially means four interconnected things. First of all, being the first choice for clients secondly, being the first choice for advisers thirdly, being the most effective operator in the market and fourth, having the most trusted name.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

And so those are the cornerstones of what we're going to try and do here. But our immediate focus is on optimizing the business, as Paul said, and creating the conditions for growth. The IWI integration and all of the work that's taken place on consumer duty have been both essential and transformative to the business. They also required a huge amount of effort and focus and care and attention. And let's not pretend that hasn't been challenging.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

It's been an awful lot of work. The team now has done the hard yards. And I'd like just to take a moment to thank colleagues around the business who may be listening to this call and recognize the efforts that they've had to put into that integration work alongside everything else that they've had to do. And it's worth, I think, recognizing that accomplishment because it's a big one. But now we have a real opportunity, and we can look forward and upwards.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

And I think it's a really exciting opportunity to build, as I say, the best wealth manager in The U. K. Does mean getting sharper and more ambitious in the way that we evolve the business. And it means being honest about where we are today. As Paul said, there are opportunities to optimize what we're doing to simplify, to streamline and to generally raise our game operationally and commit to a process of continual improvement.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

And that work, I can assure you, has already begun with real intent. I'm going to say more about our plans and ambitions at full year results. I am actually a newbie. I've only been here for four weeks, although I will say Clive did put me to work during my gardening leave. But I'd really, for now, just like to thank Paul in particular.

[Jonathan Sorrell, Group CEO & Director at Rathbones Group]

I could not have asked for more during this transition in terms of collaboration, the gracious way that Paul has welcomed me to the firm. I've already learned a huge amount in the last several weeks. And Paul's impact on the business, both as CFO and CEO over, obviously, a very long period of time, I think, has been immense. And I'm conscious I have rather large shoes to fill literally and figuratively.

[Clive Bannister, Chair at Rathbones Group]

Thank you, John. Before we begin the Q and A, I have to remind you that John, as he's already said, has only been in post for about four weeks. So I'd ask you that the questions go in this direction, easy questions for Paul, difficult questions for you and the way these things are organized because they are responsible for the delivery of first half twenty twenty five results. We're going to start on the floor with questions for anybody in the room, and then, Shelley, we will go online. So Paul, I'm now handing over to you, and I think your first one is on the right.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Thank you, Clive. Mr. McCann, good day to you. Yes, we'll get to you. Don't worry. Anybody think, David, you've done this before?

[David McCann, Director - Equity Research Analyst at Deutsche Numis]

Likewise, Paul, and congratulations on your retirement for your efforts over the years. Yes, the customary free from me, please, if that's okay. Just firstly on the buyback. You talked in the footnotes of the slide about keeping Investec below the thresholds at the time of when they came on. Obviously, buyback, in theory, means retiring about 2.5% of the shares.

[David McCann, Director - Equity Research Analyst at Deutsche Numis]

So how is that going to work in practice? I appreciate they've come down a little bit since then with the share issuance, but square that circle for us. And also just thinking about the timing of the 50,000,000 and the liquidity of your shares, how long do you think it will actually take to get that money out into the market? And then second question, probably more for Ian on the synergies. You said that you're obviously running ahead of schedule.

[David McCann, Director - Equity Research Analyst at Deutsche Numis]

You hope to have them in place by the end of this year. So I'm just wondering why it takes to Q4 next year to actually see the real uplift in the operating margin. So surely, we should be seeing that throughout the whole year of next year, shouldn't we, if you've achieved the synergies by the end of this year? And then finally, just more conceptually, you probably noticed that Jupiter report CCLA business that obviously directly competes with your charities business in various ways. So I just thought what you thought that impact might have on that sector of the market, either potential opportunities to win mandates if there's any loose clients in that business and indeed risks of potentially a better resource competitor?

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

David, I'm going to take the latter one, but after Ian's taken the first two.

[Iain Hooley, Group CFO & Director at Rathbones Group]

You, Paul.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Ian, are you all right with that?

[Iain Hooley, Group CFO & Director at Rathbones Group]

Absolutely, yes. So just on the buyback, our normal approach with our approved share schemes in terms of those that form part of our remuneration structure, for certain of those schemes, we our approach is to issue new shares. For the other schemes, we fund those by buying shares in the market. So for those, we anticipate issuing new shares in relation to fund those approved share schemes during the course of the buyback period. So taking those into account, then we can complete the buyback of GBP 50,000,000 without the Investec voting rights exceeding the 29.9%.

[Iain Hooley, Group CFO & Director at Rathbones Group]

So that's how we'll do that. Just on the timing, you're right, the liquidity in the market will determine the approach. In determining the right size of the buyback, we have taken into account the length of time we think it will take. And it will probably take us beyond the announcement of the full year results, probably circa eight months, eight, nine months, something like that or maybe a little bit longer, just depends how things go. So that's been a determining feature for us as to how far into the future it's appropriate to continue.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And of course, David, we won't start that until we get reg approval, of course. So that's when the clock starts.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Yes. So I said September, that's an estimate of how long regulatory approval will take, but we need to have that in place, of course, before we actually begin. Just on synergies, we'll be continuing to deliver synergies during the course of this year. So we will have the full year benefit from 2026, as you say. There is also built into the margin target a other elements of cost discipline, but also the revenue growth that we talked about.

[Iain Hooley, Group CFO & Director at Rathbones Group]

The 2%, that's dependent on growth in funds under management or growth in advice revenues. And it's the build of that part that will take us into the 2026.

[David McCann, Director - Equity Research Analyst at Deutsche Numis]

So we should be thinking about 28% from the start of next year building to 30% by the end. Is that right? Just to be clear on that?

[Iain Hooley, Group CFO & Director at Rathbones Group]

It is that's a reasonable yes. But there is like I said, there is elements of cost discipline that don't necessarily fall to be treated as synergies but form part of our overall approach in driving efficiency in the business. So there will be some of that building in the 2026 as well. So I would just temper that assumption with that caveat.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And David, the usual caveat of it's been here a wee bit of time now. And of course, we will always be subject to market movements that impact margins. So we're only trying to give you a guide in the event that markets broadly stay in a similar channel.

[David McCann, Director - Equity Research Analyst at Deutsche Numis]

And CCLA?

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Yes. Excellent. Yes. So the last question was on CCLA. Look, I think, yes, it's interesting to note, as we will well know and attest to, any inorganic transaction like that will have an impact in terms of client perceptions.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And we will, of course, have opportunities to come in and pitch. I think the important thing is that over the years, we've been trying to do a lot in the charity space, but we've been doing a lot with a tailored bespoke approach to charities. So what you'll have seen in recent in this announcement and in recent statements we've made is that we're actually moving a little bit more into that competition space for the CAFES, Charity Authorized Investment Funds, which is interestingly what CCLA have been doing over the last few years. So there will be an opportunity for us to compete, and we think we've got a very strong product in that place coming down the pike. But we will, therefore, be able to offer some strong bespoke solutions for charities but also a CAFE solution for charities, which is provides a lot more consistent investment performance.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And lastly, combining that with a much stronger green bank responsible investment overlay. So we think we've got the proposition at the right time to respond to a transaction like that. And obviously, we are also beholden to the cycles of trustee reviews, which typically drives the opportunities in the charity space, are they every three years, are they every five years. We will be competing very strongly in all of those. Very much look forward to this a bit of a rebuild and a refresh of our charity proposition to offset that.

[David McCann, Director - Equity Research Analyst at Deutsche Numis]

Thank you very much.

[Iain Hooley, Group CFO & Director at Rathbones Group]

May I just overlay just one other point, David, was the in terms of the run rate of the margin from the start of 2026. We also have the FSCS levy that is fully expensed in the first half of the year. So our normal pattern of the margin is that there's a better second half than the first half for that reason. So that's another point just to factor in.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

David, thank you. Ben, good morning to you. It was oh, sorry, Stuart. Do apologize. If Shelley's chosen Stuart, then we'll have to go.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Ben, I do apologize to you. Just My peripheral vision, I

[Stuart Duncan, Financial Analyst at Peel Hunt]

following David, I've got three questions as well, if it's okay.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Sure.

[Stuart Duncan, Financial Analyst at Peel Hunt]

First of all, on the new MPS proposition. I'd just be interested in how you think that can compete in what is a very crowded sector, and actually what the margins would be in that as well? Secondly, on the asset management side, you touched about the sort of new teams you were launching.

[Stuart Duncan, Financial Analyst at Peel Hunt]

Just interested more generally how you think can scale some of the tail of smaller funds in that business. And then lastly, on the new capital allocation policy. One of the points about organic growth you touched on was the sort of investments that we required. Just in general, what you're thinking about there and how significant that could be?

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Yes. Okay. Absolutely, Stuart. Thank you. Right.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So effectively, two things on the MPS proposition. I'm often asked the question about why we have an asset manager in the group and alongside a wealth manager. So the opportunity that, that presents alongside the combination, which already had an NPS in the marketplace, has given us an opportunity to effectively turbo boost that. And from a margin perspective, overall, there'll be no DFM fee with that. Fees will be capped at 0.5% for the MPS proposition itself.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

The opportunity from our margin perspective is to include our in house funds capability. So there's manufacturer's benefit in that, which has enabled us to price that pretty keenly and also leverage off the relationship that we already have in the marketplace that David Coombs has built up over a number of years. So we think the MPS is true refresh that's combined an already existing MPS proposition with in IWNI, added the power of Rathbones to that, and we think it will be a very competitive product. Your second question, I think in terms of small funds, yes, look, think inevitably over the years, you'll know this, Stuart, is that there is the level that we've been able to offer bespoke any bespoke product to smaller portfolios. It's been rising all of the time, which again is one of the reasons why it dovetails in with Rathbone Asset Management and it dovetails in our ability to deliver fund based propositions.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So forcing that pace, we've found we've always been reticent to do that, but encouraging that to get the right solution for the client. Let's not forget the rules we live by in terms of consumer duty and outcomes, but it gives us great opportunity to bring together the best of Rathbone Asset Management and the best of Rathbones across the organization. So there's a lot of exciting things we can do there now that we are the size we are and the tools we've got in the shed. Your last question, I don't remember it, Stuart, but I knew it was for Ian.

[Clive Bannister, Chair at Rathbones Group]

New capital.

[Stuart Duncan, Financial Analyst at Peel Hunt]

Investment for organic growth.

[Iain Hooley, Group CFO & Director at Rathbones Group]

Yes. So investment for organic growth. Mean in terms of those elements of the capital allocation that we need to, we need to maintain capacity and flexibility to be able to invest in the opportunities that we see. So there's never a right answer to how much capital should you actually attribute to that. But what we've tried to do is to ensure that we maintain a sensible amount of flexibility whilst maintaining an overall efficient position, taking into account the rate at which we're able to return capital overall.

[Iain Hooley, Group CFO & Director at Rathbones Group]

So we'll continue to this will be part of our ongoing discipline, and we'll continue to review and adapt to that as opportunities and strategies emerge.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Was always drawn as a parallel to me, Stuart, that actually nobody really gets property footprint right either. So it's very hard to get whatever the inorganic opportunity in terms of your capital is. So as Ian says, there's obviously a degree of judgment in this. But for the moment, it's important to remember that when we talked about the combination of Investec Wealth, that was the big one. And rather doing a series of acquisitions inorganically, we've done a large one.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And as we've been talking about, we're now the other side of it. So I think we're trying to trim the capital base with that type of philosophy behind it to obviously maximize returns. Ben, I apologize.

[Ben Bathurst, Equity Research Analyst at RBC Capital Markets]

Thanks, Paul. It's Ben Bathurst from RBC. First of all, I'd like to wish you all the best of luck for your future endeavors. Before moving on to my questions, which are in a couple of areas. Starting with some information you gave at the full year around establishing a presence in Dublin.

[Ben Bathurst, Equity Research Analyst at RBC Capital Markets]

And just interested to hear what the progress has been there and what the thinking is around what that's going to offer the group. Possibly then a related question around that, There's no shortage of press articles at the moment about wealth exodus from The UK. Is that something that you're seeing? Can perhaps offer some color around in terms of its potential future flow dynamic for us to be aware of. And then finally, just really tracking headcount.

[Ben Bathurst, Equity Research Analyst at RBC Capital Markets]

I haven't seen an update in materials today around financial planners and investment managers. Just wondered if you could give an update around developments there in the first half and what we should be thinking about for the rest of the year in those areas?

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Yes, absolutely. Okay. Well, look, I think on the Dublin question, we announced that as something that we would be progressing during 2025. We also said that we would be engaging in discussions with the regulator at that moment in time, and we want to make sure that that's done in a very constructive and timely fashion. So we're working our way through that.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

When there's news on Dublin, we'll let you know. It was an opportunity, of course, to secure a way into the European market. We said at the time, Rathbones did not have, unlike a number of our peers, a footprint in The EU. But obviously, we've been focusing on our core business in The UK in the first six months, as you might expect, and working on Dublin in the background. So whenever that gets to maturity, we'll let you know.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

In terms of, look, the wealth exodus, all I can do is offer a little maybe anecdotal experience. Certainly, from a Rathbone's perspective, we are certainly hearing a number of engagements of clients moving. It's very helpful that we've got an SEC license. So if clients do want to move to The U. S, we can continue to service them, and we're confident that we can continue to service them in the EU and where they go as well.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So very much a focus on maintenance from that perspective. But yes, lots of anecdote we hear about particularly in the higher end of wealth. Unquestionably, the numbers don't lie. There's a number of very high net ultra high net worth individuals who are moving to sunnier climbs, maybe from a physical as well as an economic perspective. I think the other point is, if we're on anecdote, we are watching carefully in the event that we do see a flow of people actually from The U.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

S. Or indeed people who have come from The U. S. And are in The U. K.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And want to stay, we are hearing quite a bit anecdotally about that as well. So look, one to watch but nothing that would be a trend either way that I would point you to that would materially impact our results. In terms of headcount, as you might imagine, whilst we're going through a lot of change in the organization, I think it's important that we do that and give you a good indication of what it's going to be in the future. So we'll be getting more information on that when we go out in the full year. But basically, assume for the moment that it's a steady accretion of quality high quality planning and investment management individuals that we will be talking to.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We are very busy in terms of individuals that now want to join what is a stable and very well positioned organization. So we're very much looking forward to doing that but won't change our standards in terms of quality.

[Ben Bathurst, Equity Research Analyst at RBC Capital Markets]

Thank you.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Thanks, Ben.

[Christiane Holstein, Associate - Equity Research at Bank of America Merrill Lynch]

Hi. This is

[Christiane Holstein, Associate - Equity Research at Bank of America Merrill Lynch]

Cristiano Holstein from Bank of America. I also just want to say congratulations to Paul and welcome to Jonathan as well. You, I have three questions. So on the operating margin of 30%, which has been reiterated, so it seems as though you're quite confident in achieving the 28% for the synergies. What gives you confidence in the remaining 2% given the recent headwinds around macro environment and cost headwinds as well?

[Christiane Holstein, Associate - Equity Research at Bank of America Merrill Lynch]

And what's consensus missing given that they have 28% at the moment in their Secondly, on synergies, you've achieved those quite quickly and ahead of target. Do you think there's any upside to the initial $60,000,000 target number there? And then thirdly, on surplus capital. So there's still quite a bit of surplus capital on the table. Where do you see the greatest opportunity for M and A?

[Christiane Holstein, Associate - Equity Research at Bank of America Merrill Lynch]

And what do you think in terms of timing given IWNI is still being processed? Thank you.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Cristiano, thank you. Let me take the first point. I think the it's inevitable that we're in any 30% margin aspiration, we have to put in something for growth. And I think Ian outlined one of the first major pillars of that, which is that we have had a lot of internal facing people over the next six months the last six months. So there's an opportunity very much so as we go into the next sort of eighteen months for those individuals to get back to business as usual.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

That's a big driver. We do have a material amount of financial planners, 120, 130 financial planners. We do have 700, seven fifty plus of investment professionals out there. So that's the first point that we get back to normal organic growth. We will always be subject to market sentiment.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And inevitably, I think it's that's been impacted by a couple of factors, think. The first is whilst cash is delivering a reasonable return, that tends to have a bit of a drag in terms of reticence to reallocate funds into equities in the shorter term. So it is a little bit interest rate dependent. Ian talks a little bit about where interest rates are going to go. You'll know how many price reductions are impacted are already priced in the market, 2% to 3%.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So to the extent that interest rates start to say if there's unused cash, then that doesn't encourage investment in equity markets. Secondly, we often find our biggest competitor from an asset allocation perspective to be real estate. And it's the Bank of Mum and Dad dynamic. It's the can I buy property for the kids or will that be an appropriate alternative asset class? So we do watch that as well.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

But I think the markets are favorable for investing. Think government orientation on growth, regulatory increasingly turning around to try and promote growth. Advice, guidance, boundary review is interesting as a statement in itself. Discussions on cash ISAs are interesting. Investing is starting to come back into the headlines as people realize that they need to save for the longer term.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So all of those things, I think, are helpful. So we've got some external factors. We've got some internal factors. We're doing a lot, as you're giving a bit of a flavor of, in terms of marketing and distribution, adding a lot of skills to the organization as we reorientate to the future. We have a very large IFA network that now needs our full attention, and they will be getting that full attention.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And to Stuart's point earlier on MPS, yes, those products are lower margin, but they're also a way in to have more meaningful commercial relationships with IFA groups. So all of those things have been working in the background over the last six months or so as we've been integrating, migrating and very much looking forward to those landing. And of course, the last thing is the brilliant new leadership that will be part of the group.

[Clive Bannister, Chair at Rathbones Group]

No pressure.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

That will have lots of focus to achieve growth as well. I do that with a smile on my face. Somebody did that to me, I think, when I joined. I'm getting my own back. Christian, I hope that helps to answer your question.

[Iain Hooley, Group CFO & Director at Rathbones Group]

And just on the synergy potential synergy upside, we're very pleased we've been able to deliver or expect to deliver the £60,000,000 target ahead of the original schedule. And as we will maintain our focus on trying to maximize the opportunity, we're very focused on that. But I think we need to work through the optimization phase to see what other potential opportunities there may be. So at the moment, we wouldn't commit to be going beyond 60,000,000 but we'll strive to deliver the maximum we possibly can. In terms of surplus capital, there are M and A opportunities still out there.

[Iain Hooley, Group CFO & Director at Rathbones Group]

We're still in the consolidated marketplace. As Paul said, we've done the scale opportunity. There may be opportunities out there for smaller opportunities that deliver some benefit to us. But I think in terms of what we would do with that surplus, well, the allocation framework we've got now is we will continue to weigh up those opportunities against our ability to return capital going forward. So that will retain our discipline for now.

[Christiane Holstein, Associate - Equity Research at Bank of America Merrill Lynch]

Thank you.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Thank you. Any other questions in the room?

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

We do.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Thank you.

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

Hi, good morning. It's Vivek Raja from

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Hi, Vivek. Nice to see you.

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

Hello. Three things I wanted to ask you about, please. The first one is outflows. So you referenced changing factors which are affecting it.

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

I just wondered if you could just talk to the outflows in Q2, the makeup of it and what we should expect potentially in the near term and medium term for outflows. The next thing I wanted to ask you about was advice outlook. So you've referenced positive comments there, which plays to the macro and obviously plays to the capabilities you've got there. I just wondered if you could say a bit more about that, what you're seeing in terms of the pipeline, what sort of if might, what's the revenue growth we can expect there? And then the final thing is the net interest margin.

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

So Iain, you talked about, I think, if I understood you correctly, downside potentially to the margin below 4% base rate. Could you just talk to the sensitivities there, please?

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Vivek, thank you. Yes, we'll do that. Ian, if you would be kind enough to just talk a little bit about the outflows. And if you wanted to do the base rate while you're at it, then I'll come back on the advice point, Vivek, if that's okay.

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

Yes.

[Iain Hooley, Group CFO & Director at Rathbones Group]

So like much of the industry, we've seen a period of outflows being elevated. Those have been for two principal reasons, really the macro side of higher interest rates and higher inflation resulting in existing clients taking a portion of assets out of the portfolio. We've also had our own specific factors that have driven outflows a little bit higher for reasons we've talked about in the past. I think the at some point, the tide will turn on those macro factors as interest rates start to decline and expectations on returns begin to change and people feel more inclined to put money new monies into the portfolios or have less reason to take money out.

[Iain Hooley, Group CFO & Director at Rathbones Group]

And our specific factors have sort of continued to have receded over time as we talked about at the year end. So I think for those reasons, that's there's a reason to feel more optimistic that, that period of elevated outflows is perhaps receding. However, I would just caution, this is one quarter, and we need to be careful about reading too much into one specific quarter. But nevertheless, pleasing to see things going in that direction. In terms of the net interest margin sensitivities, first of all, our treasury strategy, which includes having a certain amount with the Bank of England and certain amount in certificates of deposit and things like that, sheltered us a little bit in first instance from any immediate impact of a reduction in interest rates.

[Iain Hooley, Group CFO & Director at Rathbones Group]

I think what we the way the interest rate reductions are playing out is the reverse of how they played out on the way up. So at the above that 4% level, then the majority of any increases were passed on through interest payable and and the reverse is happening on the way down. There becomes a point there where and with 4% is probably the level where we start to reduce our margin in order that the there's a sharing of that reduction between the interest rate we earn and the interest rate we pay to clients. So probably, if you as we get below 4%, then maybe half of that margin reduction would be begin to be passed on to through our or be taken by us or absorbed by us in a reduction in the interest rate margin, if that gives you a feel. That probably takes us down to sort of once we get closer to 3%, that might change again.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Yes. And just to make the point that we're obviously not competing with in the retail deposit market. That's not what we do. But we do regularly benchmark to make sure that the rate that we are obviously offering clients is more than competitive because that's the other angle to this. Very important that we have the consumer duty principles that overlay that policy that Iain was just talking about.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So talking a little bit about advice. This seems to be bit of an event to introduce a bit of nostalgia. So maybe I'll do that in answering your question, Vivek. Certainly, Rathbones five, six, seven years ago was very investment focused. The proposition was led by investment.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Since the acquisition of Saunders and House and indeed now the combination within Investec Wealth, the business is much more balanced in terms of its ability to offer financial advice solutions. So there are two things that effectively will are fueling my optimism in terms of where that advice is, notwithstanding the well chronicled need for financial advice in The U. K. And those factors are, firstly, we've put three financial planning businesses together effectively, Rathbain Financial Planning, what was in IWNI, Invested Wealth and Investment and Saundersen House. That is largely all done now.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So we are operating on one platform together with one proposition. We also have a mix of approaches from those businesses. Firstly, in terms of how financial planners work with investment teams to bring the propositions together and actually deliver a service that is of a range of outcomes for both. In other words, we now have the capability to offer an investment solution that is funds based and quite keen from an economic pricing perspective with a great deal of advice, full fat, if you like, advice. We can offer full fat investment tailored bespoke investment with full fat advice.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We can also offer full fat tailored investment solutions with what I'm calling point in time advice, which is a little bit closer to the AGBR advice guidance boundary type of targeted support. It's more than targeted support. It's more in that simplified advice bucket. But it's an opportunity to tailor the investment and the advice solution across the piece to client preferences, which is really, really important. And what that does is it enables us to look much more actively at the underplanned opportunity within Rathbones, let alone the appetite externally for financial advice.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And what Saunders and House brought us was a capability to market advice for advice's sake in sectoral markets, particularly in terms of lawyers, accountants, etcetera. So upcoming emerging wealth, which combines very nicely with a lot of the things Rathbones was doing in entrepreneurs in that space and a lot of things Investec Wealth was doing in the higher net worth space. So one of the reasons that we're talking about optimization looking at the past is that we can combine a lot of those financial advice capabilities with investment capabilities. And also pick up on what will is an emerging trend of training people right from the start to become dual hatted in terms of being able to help us tailor our advice and investment proposition mix and be able to deliver that in a much more cost effective way. So this is a this has been a jigsaw that we've been putting together now for three or four, five years and is a super opportunity for us to take forward. Vivek, does that help?

[Vivek Raja, Equity Research - Financial Companies at Shore Capital]

It does. Thank you very much. Ian, thanks for your answers. And Paul, wish you well. Thank you.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Thank you, Vivek. Appreciate it. Any more questions from the audience this morning? Shelley, do we have

[Shelly Patel, Head - IR at Rathbones Group]

one In interest of time, because I'm very glad that we are running over, will just ask one question from the web and we can get back to people individually. The question is, do you believe the full potential benefit from the relationship with the broader Investec Group can be achieved while they remain, in effect, a minority shareholder?

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

I think that's a loaded question, but let me take it. I think in short, yes. As John mentioned, it is a pretty unique opportunity to have a shareholder that has a material and stable interest in this group. As we've been talking about over the particularly the last couple of years, that relationship is deeper than just the relationship with Investec Bank. There's an offer there's an opportunity to work with their wealth business.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

We have worked with them to solve some of our technology solutions as well. So this is a relationship that that we can treasure and thrive. And actually, have an organization structure that of a shareholder that's not only looking long term and very supportive but also has an opportunity to help us with distribution and help us with cost efficiency, I don't see anyone in The U. K. Market with that unique opportunity.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

So we will be working very hard to amplify that and get the best out of it.

[Shelly Patel, Head - IR at Rathbones Group]

Thank you very much. And I might just ask one more from the line. Ian, this one's for you. The 178,000,000 of surplus capital, can you clarify whether it includes the dividend to be paid and the £50,000,000 buyback pro form a?

[Iain Hooley, Group CFO & Director at Rathbones Group]

So that's before both of those things.

[Shelly Patel, Head - IR at Rathbones Group]

I might just now ask if there's any calls any questions from the conference line. There is an operator, I think, who might just We

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

currently have no questions

[Shelly Patel, Head - IR at Rathbones Group]

I'll from the hand back to you, Clive.

[Clive Bannister, Chair at Rathbones Group]

Thank you very much, Shelley. Before we close, I'd like to take a moment to acknowledge Paul's contribution. On behalf of the entire board, I want to thank him for the passion, energy and commitment that he has shown over nearly seventeen years, six of which he's been the CEO of this fine business. In this time, he's overseen the growth of the business from something which had about £10,000,000,000 up to something that has about £110,000,000,000 that is a 10x growth delivery. Paul has successfully steered the group through shifting markets, regulatory change and wider geopolitical challenges, always with clarity, integrity and a sense of purpose.

[Clive Bannister, Chair at Rathbones Group]

He leaves RathsBones in a position of real strength. Now this isn't quite goodbye. I've written here, Paul still has two more months of hard work ahead, but I wanted to take this opportunity, bittersweet opportunity, to say thank you for everything that he's done. And Paul, I think you want to say a few final comments.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Thank you, Clive, for those kind words. Thank you, John, for those kind words. Yes, I thought, why the hell? It's the last one. It is seventeen years, almost to the day when I joined Rathbans.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And I think the scary thing is that there are one or two phases in here that were there at the time. So I don't know whether that's scary for me or scary for them. It's interesting. But I really have had the privilege to work with some amazing people. They've all worked tirelessly to take the business forward and really do the level best for clients.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

And that's been really refreshing for me. It's been fuel in the tank. I'd like to thank Clive and the Rathbone Board for a huge amount of support over the years as well. Look, I've loved the interaction with U. K.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

Capital markets. There's been some sort of event every year that has presented either a challenge to me or an opportunity. And my interactions with analysts and investors have been, believe it or not, truly uplifting for somebody as sad as me, allowing, look, at an exchange of feedback that has been lots of sharing and lots of debating and lots of challenge, but also lots of inspiration as well, pretty much exactly as it should be. So I wanted to celebrate that. And I know that the industry is very different.

[Paul Stockton, Group CEO & Executive Director at Rathbones Group]

I joined before this thing called Brexit, before this thing called MiVID II. So things have changed quite a bit in capital markets since then. But if the market continue promote risk taking, the facilitation of investment opportunity, which at the end of the day lands in our laps as an opportunity to participate in, it will always remain close to our hearts. And Rathbones now has a very solid place in the world, and I very much look forward to keeping up with its progress in the many years ahead. Thank you all for attending today on the phone and elsewhere in the We didn't have that seventeen years ago. So thanks again, and have a nice day, everyone.

[Clive Bannister, Chair at Rathbones Group]

So I want to say thank you again. Can we stand and thank

Participants

Executives

• Clive Bannister, Chair
• Iain Hooley, Group CFO & Director
• Paul Stockton, Group CEO & Executive Director
• Jonathan Sorrell, Group CEO & Director
• Shelly Patel, Head - IR

Analysts

• David McCann, Director - Equity Research Analyst at Deutsche Numis
• Stuart Duncan, Financial Analyst at Peel Hunt
• Ben Bathurst, Equity Research Analyst at RBC Capital Markets
• Christiane Holstein, Associate - Equity Research at Bank of America Merrill Lynch
• Vivek Raja, Equity Research - Financial Companies at Shore Capital