Rathbones Group Plc · LSE:RAT
Rathbones — Investor Day (October 2019)
52 slides from Rathbones's investor day presentation, October 2019
Slide 1: Rathbones strategic update 2019
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Slide 2: Speakers
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 1 Speakers Paul Stockton Jennifer Mathias Mike Webb Chief Executive Group Finance Director CEO of Rathbone Unit Trust Management Rupert Baron Ivo Darnley Ian Dembinski General Manager General Manager Head of Client Development
Slide 3: Agenda
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 2 Agenda 1. Our present — market background — Rathbones’ position 2. Our future — ambition and purpose — six strategic priorities 3. Balancing productivity and investment 4. Moving forward 5. Q&A
Slide 4: Look forward
Rathbones Look forward
Slide 5: Our target market is large and continues to grow
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 4 Our target market is large and continues to grow Robo-advisers £1.7tn and secular growth opportunities remain <£5bn, 0% Several business models Vertically Several business models Self-directed integrated firms £220bn, 13% £210bn, 12%
Slide 6: Rathbones has the platform to succeed…
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 5 Rathbones has the platform to succeed…
Slide 7: …with a robust business model…
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 6 …with a robust business model… Owned infrastructure + Deep expertise + Relevant solutions Trusted relationships Discretionary investment Scalable Individual Charity/Greenbank/Specialist Private operating investment clients, platform m
Slide 8: …and product offerings suitable for the clients of today and tomorrow
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 7 …and product offerings suitable for the clients of today and tomorrow DFM¹ Afinancial product range that is suitable for clients, advisers and intermediaries Personalised investment Provides a cost effective solution for wealth mana
Slide 9: We recognise that client expectations are changing
October 2019 Page 8 Rathbone Brothers Plc | Strategic update 2019 We recognise that client expectations are changing What clients want What this means — value for money — quality service and competitive investment outcomes — transparency — clear fee-based pricing — digitally-enabled service — seamle
Slide 10: Our future
Look forward
Slide 11: Taking responsibility is critical to building on a powerful brand
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 10 Taking responsibility is critical to building on a powerful brand Our purpose Our principles We see it as our responsibility to invest for everyone’s tomorrow. That means doing the right thing for Responsible and entrepreneurial in c
Slide 12: Our ambition: a strong reputation, a strong proposition
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 11 Our ambition: a strong reputation, a strong proposition Growing, preserving and transferring wealth for private clients and their professional advisers Our ambition is to be recognised as the Institutional-quality Relationship-led: i
Slide 13: Our strategic priorities
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 12 Our strategic priorities Enriching the client 1 Enhancing valued services and adviser proposition and experience 2 Deepening investment skills 3 Penetrating specialist markets Supporting and delivering growth 4 Driving organic growth
Slide 14: 1. Enhancing valued services
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 13 1. Enhancing valued services Overview 1 Enhancing valued services — enhancing the experience for private clients — a dedicated service for financial advisers 2 Deepening investment skills 3 Penetrating specialist markets 4 Driving or
Slide 15: Enhancing the client experience
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 14 Enhancing the client experience 2/3 Digital Of the decisions customers make — on-boarding are informed by the quality of the client journey + — app/portal delivery — secure and McKinsey Holistic customised mailing c.46,000* planning
Slide 16: Financial advisers: a dedicated service and our differentiated marketing approach
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 15 Financial advisers: a dedicated service and our differentiated marketing approach — a tailored digital journey — clear responsibilities — a quality service — structured investment solutions — our LED approach
Slide 17: 2. Deepening investment skills
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 16 2. Deepening investment skills Overview 1 Enhancing valued services — fostering our investment culture — broadening capability and coverage 2 Deepening investment skills — investing responsibly 3 Penetrating specialist markets 4 Driv
Slide 18: Fostering our investment culture
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 17 Fostering our investment culture 58 Participants on investment mentoring scheme 74 Investment managers on investment committees >1,000 Companies visit our offices each year
Slide 19: Broadening capability and coverage
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 18 Broadening capability and coverage 33 Research team growth Strong research department 35 Research support 65% 30 & mgmt. Stewardship 25 Possess >10 years investment experience Risk 20 Asset allocation >7,000 15 Equity & fixed income
Slide 20: Investing responsibly
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 19 Investing responsibly — investment returns of tomorrow are linked to investment decisions of today — stewardship and engagement have always been intrinsic to our approach — responsible investment policy will broaden this — ESG* analy
Slide 21: 3. Penetrating specialist markets
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 20 3. Penetrating specialist markets Overview 1 Enhancing valued services — the importance of specialisms — building on existing capabilities 2 Deepening investment skills — capitalising on Greenbank 3 Penetrating specialist markets 4 D
Slide 22: Where we specialise, we succeed
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 21 Where we specialise, we succeed Charities – targeting a top–three position — ensuring value for money — establish an overseas research capability — growing investment consultants relationships Growing additional specialisms — interna
Slide 23: Capitalising on the Rathbone Greenbank opportunity
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 22 Capitalising on the Rathbone Greenbank opportunity Building on a strong reputation — at the forefront of ethical, sustainable and impact wealth 20+ industry trends years in the market already — a differentiated offering — business de
Slide 24: 4. Driving organic growth
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 23 4. Driving organic growth Overview 1 Enhancing valued services — managing client facing capacity — structuring distribution 2 Deepening investment skills —a new focus on client development 3 Penetrating specialist markets —leveraging
Slide 25: Managing client-facing capacity
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 24 Managing client-facing capacity Investment manager Capacity development stage considerations Newly — limited capacity to grow qualified — need to build relationships Fully qualified, — high capacity to grow low FUM — beginning to est
Slide 26: Building our investment graduate academy
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 25 Building our investment graduate academy — introduce formal graduate programme to create future talent — offer attractive package to source quality individuals — build industry knowledge, skills and hands-on experience over two years
Slide 27: Unlocking growth: Select Portfolio Service
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 26 Unlocking growth: Select Portfolio Service Using in-house multi-asset funds c.30% of clients — execution only less than £150,000 — direct link into multi-asset funds — a better client outcome 2.5% — maintains the client relationship
Slide 28: Addressing investment management team succession: the solution
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 27 Addressing investment management team succession: the solution For illustrative purposes only
Slide 29: What good investment teams look like
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 28 What good investment teams look like
Slide 30: We are well organised for growth
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 29 We are well organised for growth International¹ Rathbone Dedicated client Investment Fund based Financial adviser development team Management solutions distribution team International Direct Professional Nationals and Financial inter
Slide 31: A renewed focus on client development
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 30 A renewed focus on client development Role of client development team Building Delivering Expanding investment full range of our footprint manager services to in growth marketing skills clients segments
Slide 32: New business development: an example of great teamwork
October 2019 Page 31 Rathbone Brothers Plc | Strategic update 2019 New business development: an example of great teamwork 1 Rathbones sponsors external entrepreneurial 6 Investment in discretionary mandate events in 2018 for £9.6 million 2 Specialist adviser sells 5 Initial Rathbone Financial busine
Slide 33: Driving growth through in-house financial planning
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 32 Driving growth through in-house financial planning Driving growth and retention — existing clients – reassurance and retention — new clients – entry point into wealth management — business development support More attractive proposit
Slide 34: Building an in-house financial planning footprint
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 33 Building an in-house financial planning footprint Rathbones today Rathbones in five years’ time Growing support Established support Supported from other location
Slide 35: Driving growth through external financial advisers
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 34 Driving growth through external financial advisers
Slide 36: There's an LED solution for every client
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 35 There’s an LED solution for every client Execution only Adviser as adviser or (full adviser responsibility) adviser as introducer Cost Lower Higher Client service Funds MPS Managed Bespoke Reporting Basic Enhanced Comprehensive Compr
Slide 37: Vision Independent Financial Planning
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 36 Vision Independent Financial Planning — retaining independence — continued growth in advisers — widening regional footprint — strong collaboration across Rathbone offices and Rathbone Financial Planning
Slide 38: Rathbone Funds: a growth engine
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 37 Rathbone Funds: a growth engine — build on the four franchise strengths — product development — incubation — enhance ESG market segments — support the broader business — build our international business based on Brexit infrastructure
Slide 39: 5. Our culture and values
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 38 5. Our culture and values Overview 1 Enhancing valued services — what matters to employees — how our strategy will address this 2 Deepening investment skills 3 Penetrating specialist markets 4 Driving organic growth 5 Our culture and
Slide 40: What matters to our people
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 39 What matters to our people — vision Overall engagement Culture — communication and collaboration — diversity — clear progression paths Career — leadership skills 86%* — simple processes Engagement Infrastructure — systems and technol
Slide 41: How our strategy will address this
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 40 How our strategy will address this Strong commitment to career development Nurturing our existing key talent Recruitment Incentivising success
Slide 42: 6. Driving productivity
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 41 6. Driving productivity Overview 1 Enhancing valued services — a quality client experience — making us easy to do business with 2 Deepening investment skills 3 Penetrating specialist markets 4 Driving organic growth 5 Our culture and
Slide 43: Creating capacity for a quality client experience
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 42 Creating capacity for a quality client experience Support for client Ease of client administration Enabling our people prospecting and communication Creating capacity Structuring Embedded digital processes and processes Driving produ
Slide 44: Creating capacity and making us easy to do business with
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 43 Creating capacity and making us easy to do business with Short-term Medium-term Long-term 1 – 3 years 3 – 5 years 5+ years Our clients Quality Delivering high-quality services supported by our systems and processes client New portal
Slide 45: Slide 45
Slide 46: Balancing productivity with investment for long-term growth
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 45 Balancing productivity with investment for long-term growth Market/macro — period of investment over next 2-3 years Driving organic growth Speirs & Jeffrey Recruitment — closer to mid-twenties Productivity gains Cloud based solutions
Slide 47: Capital and dividends
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 46 Capital and dividends — robust capital position 120 — Pillar 2B buffer 100 97.4p 80 92.7p 88.7p — closed pension scheme 76.0p 78.9p pence 60 66.0p 61.0p — progressive dividend policy 40 52.0p 55.0p 57.0p 20 0 2014 2015 2016 2017 2018
Slide 48: The inorganic opportunity
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 47 The inorganic opportunity Strong track record 2018: Speirs & Jeffrey FUM £6.7bn 2015: Vision FUA £925m 2014: Jupiter FUM £1.9bn 2014: Tilney London FUM £617m — consolidating market — regional opportunities — specialist capabilities —
Slide 49: Moving forward
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Slide 50: Delivering on our strategy
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 49 Delivering on our strategy Enriching the client 1 Enhancing valued services and adviser proposition and experience 2 Deepening investment skills 3 Penetrating specialist markets Supporting and delivering growth 4 Driving organic grow
Slide 51: Thinking, acting and investing responsibly
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 50 “ Thinking, acting and investing responsibly ”
Slide 52: Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 51
Rathbone Brothers Plc | Strategic update 2019 October 2019 Page 51