Old Mutual Ltd. · JSE:OMU
Old Mutual — Old Mutual Wealth — Investor Day (November 2017)
141 slides from Old Mutual's investor day presentation, Nov 15, 2017
Slide 1: Old Mutual Wealth Capital Markets Showcase
OLD MUTUAL WEALTH (“OMW”) CAPITAL MARKETS SHOWCASE 15 NOVEMBER 2017
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward-looking statements with respect to certain of Old Mutual plc’s and Old Mutual Wealth’s plans, current goals and expectations relating to its future financial condition, structure, performance, cash flows, costs and results. It should be read i
Slide 3: Update on managed separation
Update on managed separation Material progress made, OMW and OML on track to list in 2018 OML to retain 19.9% strategic minority stake in Nedbank, post the unbundling Recent corporate finance execution Completion of second tranche of OMAM shares to HNA Completion of Kotak sale Further reduc
Slide 4: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 5: Introduction: OMW is a leading UK wealth manager
Introduction: OMW is a leading UK wealth manager Business snapshot Business Mix AuMA1 / Advisers H1 2017 Leading UK and cross-border wealth manager Intrinsic & Private Client 1,582 with £100bn+ of customer assets Advisers (“PCA”) RFPs 2 Advice & Providing advice-led investment solutions to Wealt
Slide 6: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 7: OMW: A unique combination of capabilities and scale
Strategic Overview OMW: A unique combination of capabilities and scale Vision to be the leading UK wealth manager Key financial metrics (H1 20171) Attractive proposition Based on perimeter and normalised position2 1 Purpose built, full service wealth manager delivering good Customers 900k+ customer
Slide 8: First strategic decision: where to play?
Strategic Overview Purpose built full service wealth manager First strategic decision: where to play? We chose to focus on affluent customers in the UK Wealth Market1 Large and growing UK wealth market Advice-led proposition for affluent market UK onshore liquid wealth, £ trillion3 CAGR Liquid asset
Slide 9: Second strategic decision: how to play?
Strategic Overview Purpose built full service wealth manager Second strategic decision: how to play? Business model built around customer needs Strategic decisions 1 Execution only OR Financial advice Financial Advice Independent Restricted advice advice only OR to drive growth 2 Single manager OR M
Slide 10: OMW transformed over last five years
Strategic Overview Purpose built full service wealth manager OMW transformed over last five years UK focused multi-channel wealth business A traditional UK & European life assurer Italy Switzerland Austria Poland Sold European Germany businesses France Liechtenstein Luxembourg Finland OMGI Wealth Pl
Slide 11: OMW transformed over last five years
Strategic Overview Purpose built full service wealth manager OMW transformed over last five years UK focused multi-channel wealth business A traditional UK & European life assurer A modern integrated UK wealth manager Italy Acquired Intrinsic and A Switzerland Cirilium Austria added Sesame, Caerus P
Slide 12: OMW multi-channel full service wealth model is different
Strategic Overview Purpose built full service wealth manager OMW multi-channel full service wealth model is different Designed for customer choice Advised channel Open Market channel Customers Advised: 200k+ Customers: 700k+ Develop suitable Restricted Advice Third Party Independent Advice Financial
Slide 13: OMGI single strategy less aligned with OMW model
Strategic Overview Purpose built full service wealth manager OMGI single strategy less aligned with OMW model Attractive, high growth business, more reliant on global wholesale distribution High growth business Reliant on wholesale market AuM £bn CAGR AuM H1 2017 £bn +33% 23 20 OMW1 15 20% FY 2015 D
Slide 14: OMW has leading positions across segments
Strategic Overview Leading positions OMW has leading positions across segments A B Advice & Wealth Management Wealth Platforms Advice Investment Solutions Discretionary Wealth UK Adviser Platform International CF30s1 # Net flow UK Multi-manager2 Discretionary Wealth3 UK Adviser platform4 Total sales
Slide 15: Well positioned for structural market growth
Strategic Overview Leading positions Well positioned for structural market growth Advice, investment solutions, platform consolidation and retirement i ii iii Financial advice is relatively Strong growth in investment Pensions and investments scarce solutions forecast consolidating onto platforms UK
Slide 16: Driving growth and revenues through integrated flows
Strategic Overview Multi-channel proposition Driving growth and revenues through integrated flows Integrated flows Integrated Half years £bn1 Half years £bn1 Net Flows H1 2016 H2 2016 H1 2017 Advice to OMW Investors 0.4 0.6 1.1 H1 2017 2.3 Advice to OMW Platform 0.4 0.4 0.5 Platform to OMW Investors
Slide 17: Focus on delivering good customer outcomes
Strategic Overview Multi-channel proposition Focus on delivering good customer outcomes Helping customers create financially secure futures …. “prosperity” for customers Advice Wealth Management Wealth Platforms Investment solutions and Financial planning Suitable products and wrappers discretionary
Slide 18: Significant opportunities for future growth in flows
Strategic Overview Attractive top-line growth Significant opportunities for future growth in flows 5%+ of opening AuMA net flow objective1 Capture existing share of growing market Increase number of advisers and adviser productivity to enhance integrated flows Broaden range of solutions at OMW Inves
Slide 19: Focus on risk management, strong governance and clear risk appetite
Strategic Overview Attractive top-line growth Focus on risk management, strong governance and clear risk appetite Key risks Examples Risk framework • Brexit • UK focus, EU passporting immaterial Market & • Market risk with equity markets at highs • Diversified AuMA with solutions focus Geopolitical
Slide 20: Business transformation still ongoing
Strategic Overview Opportunity for operating leverage Business transformation still ongoing Profitability and operating margin opportunity Ongoing transformation AuMA growth Revenue growth £bn £m A +21% +10% 107.3 646 • Focus on serving our 88.8 587 Advice & customers Wealth Management • Further int
Slide 21: Our exciting future
Strategic Overview Our exciting future A unique combination of capabilities, scale and market position Purpose built, full service wealth manager delivering good customer outcomes Leading positions across one of the world’s largest wealth markets with strong structural growth drivers Multi-cha
Slide 22: Brand update
Strategic Overview Brand update 22
Slide 23: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 24: Reduced number of segments moving forward
A&WM Reduced number of segments moving forward Simplifying disclosure to align with future wealth model A B Advice & Wealth New segments Wealth Platforms Corporate HO Other Management H1 2017 AuM1 : £38bn2 H1 2017 AuA1 : £79bn H1 2017 AuM1: £23bn Old segments Change from Advice OMGI Single previous
Slide 25: Advice & Wealth Management: our experienced leadership
A&WM Advice & Wealth Management: our experienced leadership Andy Thompson Advice CAGR • Appointed CEO of Advice in 2015 Restricted Financial +24% Planners1 1,582 • Joined Intrinsic in 2012 930 FY 2014 Dec-14 HY 2017 Jun-17 Paul Simpson OMW Investors CAGR • Appointed CEO of OMW Investors in 2017 AuM2
Slide 26: Advice
Advice Andy Thompson Highly Commended Winner Best Network 2016 and 2017 Best Network 300+ ARs 2015 and 2016 Money Marketing Awards Mortgage Strategy Awards 26
Slide 27: UK's second largest advice business
Advice UK’s second largest advice business 1 Fast growing restricted financial planning business in the UK A UK market leader in Advice Adviser growth at OMW Number of CF30 advisers per firm June 2016 (Excluding M&P)1 Number of OMW advisers +7% St.James’s Place 3,328 CAGR OMW Advice 1,803 1,582 RFP
Slide 28: We offer three different advice models to serve customers
Advice We offer three different advice models to serve customers Model Metrics Customer segmentation Holdings by customer1 • Launched in 2015 to align with Advisers: 52 RFP Quilter Cheviot customer base PCA customers: 6k 5% 100% Private Client Advisers • Restricted advisers Target market: £250k+ (PC
Slide 29: Why advisers choose to join and stay with us
Advice Why advisers choose to join and stay with us Stable and secure home Keeping advisers and customers safe Strong customer proposition Knowledge of advice and advice businesses Investment in technology and digital capabilities Supporting growth for advisers 29
Slide 30: Strong adviser growth through organic and acquisition
Advice Strong adviser growth through organic and acquisition Inorganic growth of Restricted Financial Planners (RFP) growth Growth of Restricted Financial Planners (RFP) Key acquisitions Restricted financial planner #’s PCA 883 1,582 acquisitions Infiniti 350 £200m AuA Financial adviser acquisitions
Slide 31: Attractive regional footprint and demographic of advisers
Advice Attractive regional footprint and demographic of advisers Geographic breakdown by adviser1 Adviser age2 Below 30 30-40 40-50 50-60 5% Above 60 16% 19% 11% Yorkshire Average North West 13% age 48 Chester London 14% 31% 23% Birmingham 14% 29% 53% London under 50 10% 6% PCA hub offices 8% South
Slide 32: Focus on improving adviser productivity
Advice Focus on improving adviser productivity Adviser experience a key driver of productivity Tenure by Restricted Adviser1 Productivity2 < 3 years £m per Adviser (annualised) 1.6 3-5 years >5 years 37% Average 45% tenure 5 years 1.0 1.0 0.9 18% 0.7 0.7 0.7 Restricted Adviser regretted attrition3 3
Slide 33: The advice process
Advice The advice process Seeking to secure the financial future of customers through long term relationships Advice process Understanding needs Review and attitude to risk Providing suitable customer advice Implementation Planning 33
Slide 34: Delivering positive customer outcomes through effective risk management
Advice Delivering positive customer outcomes through effective risk management Effective risk management… …resulting in positive customer outcomes1 • Robust adviser on-boarding and training process 15% 70% • Ongoing training & assessment Advice risk 126,9042 19,571 13,664 tracking • Independent over
Slide 35: Tailored investment solutions
Advice …and tailored investment solutions Value proposition for customers Cirilium performance1 Solutions to meet specific customer needs Performance and volatility, nine years to 30 September 2017 within defined risk parameters 200 Cirilium Dynamic Active 180 (cumulative performance) Cirilium Moder
Slide 36: Growth in advice delivering integrated flows
Advice Growth in advice delivering integrated flows 1 Advice to OMW Investors NCCF 1.1 Advised channel £bn 0.6 0.4 H1 2016 H2 2016 H1 2017 Intrinsic PCA 2 Advice to Quilter Cheviot NCCF £bn 1 2 0.11 0.04 0.06 Quilter OMW Investors H1 2016 H2 2016 H1 2017 Cheviot 3 Advice to UK Platform NCCF 3 £bn 0.
Slide 37: OMW multi-channel in practice: Birmingham office
Advice OMW multi-channel in practice: Birmingham office Team alignment between PCAs and Quilter Cheviot investment managers 37
Slide 38: Opportunities to deliver further growth
Advice Opportunities to deliver further growth Strategic focus on restricted financial planners, productivity and delivery to customers Recruitment in a fragmented market RFPs Financial Adviser School Adviser retention RFPs Productivity Pension freedom Productivity growth Growth Drivers
Slide 39: Opportunities to deliver further growth
Advice Opportunities to deliver further growth Strategic focus on restricted financial planners, productivity and delivery to customers Recruitment in a fragmented market RFPs Financial Adviser School Adviser retention RFPs Productivity Pension freedom Productivity growth Growth Drivers
Slide 40: Opportunities to deliver further growth
Advice Opportunities to deliver further growth Strategic focus on restricted financial planners, productivity and delivery to customers Recruitment in a fragmented market RFPs Financial Adviser School Adviser retention RFPs Productivity Pension freedom Productivity growth Growth Drivers
Slide 41: Key takeaways
Advice Key takeaways Leading and growing integrated advice business that delivers for customers Market complexity continues to increase demand for advice Capitalised on RDR changes to secure a leading market position1 Well controlled advice processes delivering good customer outcomes Maturing mo
Slide 42: OMW Investors
OMW Investors Paul Simpson 5 Diamond rating - Cirilium range Winner Risk Focused Fund Family Best Investment Fund Provider Multi-Manager Returns Focused Moneyfacts Awards September 2017 Defaqto 2017 42
Slide 43: A leading provider of investment solutions in a growing market
OMW Investors A leading provider of investment solutions in a growing market A market leader… …with strong growth UK multi-manager rankings (based on external data)1 AuM £bn2 Net flows H1 2017 £bn1 CAGR 14.2 +28% OMW Investors 0.8 12.1 Competitor 1 0.4 9.8 Competitor 2 0.3 Competitor 3 0.3 Competito
Slide 44: Strong growth in assets and revenues
OMW Investors Strong growth in assets and revenues AuM NCCF Revenue and revenue margin £bn £bn Revenue £m bps CAGR 14.2 +28% 46 45 48 12.1 49 9.8 44 1.5 33 0.9 0.7 Dec-15 FY 2015 Dec-16 FY 2016 Jun-17 HY 2017 Dec-15 FY 2015 Dec-16 FY 2016 Jun-17 H1 2017 Dec-15 FY 2015 Dec-16 FY 2016 Jun-17 H1 2017 4
Slide 45: Significant development of capabilities and products
OMW Investors Significant development of capabilities and products February 2012 OMAM December 2014 February 2015 August 2016 July 2017 and SIG merge to Cirilium funds OMGI and Launch of Spectrum form asset purchased from Quilter Cheviot International range management firm Henderson form multi-asset
Slide 46: Significant development of capabilities and products
OMW Investors Significant development of capabilities and products February 2012 OMAM December 2014 February 2015 August 2016 July 2017 and SIG merge to Cirilium funds OMGI and Launch of Spectrum form asset purchased from Quilter Cheviot International range management firm Henderson form multi-asset
Slide 47: Significant development of capabilities and products
OMW Investors Significant development of capabilities and products February 2012 OMAM December 2014 February 2015 August 2016 July 2017 and SIG merge to Cirilium funds OMGI and Launch of Spectrum form asset purchased from Quilter Cheviot International range management firm Henderson form multi-asset
Slide 48: Built strong investment team with a depth of expertise
OMW Investors Built strong investment team with a depth of expertise OMW Investors portfolio managers ANTHONY GILLHAM PAUL CRAIG LEE FREEMAN-SHOR SACHA CHORLEY STUART CLARK RASMUS SOEGAARD HINESH PATEL Head of Investment FUND RESEARCH TEAM DIRECT INVESTMENT TEAM RELATIVE VALUE TEAM QUANT TEAM Identi
Slide 49: Delivering outperformance for clients
OMW Investors Delivering outperformance for clients Performance over 3 years ending Jun-17 Fund performance – key funds1 AuM Sector-based performance Performance quartile H1 2017 £m 6M 12M 3Y 70% of funds above peer2 • Excellent long and short- Cirilium Balanced 1,876 1 1 1 median term performance a
Slide 50: Different customer needs require a broad range of solutions
OMW Investors Different customer needs require a broad range of solutions AuM H1 2017 £bn1 International Decumulation Accumulation MPS WealthSelect Compass & Other funds Creation Generation Cirilium MPS Voyager £1.9bn £1.4bn £0.3bn £5.9bn £3.0bn £1.7bn Narrow range of Broad range of underlying instr
Slide 51: Continued strong growth opportunities, driven by evolving investor needs
OMW Investors Continued strong growth opportunities, driven by evolving investor needs and distribution dynamics UK multi-asset market AuM1 Changing expectations driving market growth £bn 1. Asset returns likely to be lower for longer +9% 190 2. Advice risk and regulation drives Solution flows 160 1
Slide 52: Robust and repeatable investment process
OMW Investors Robust and repeatable investment process 1) Determine strategic • Source of alpha using 5) Execution • Client outcome driven Monte asset proprietary execution allocation Carlo & stochastic models optimisations • Downside tested Modern investment process 2) Bottom-up 4) Risk manager, fu
Slide 53: OMW Investors contribution within OMW
OMW Investors OMW Investors contribution within OMW OMW Investors sources of assets Split of Intrinsic sourced assets Other Advised channel Other1 £4bn Platform 28% £3.6bn AuM 60% AuM 1 £14.2bn £6.1bn Intrinsic £6.1bn OMW UK 2 43% Platform Intrinsic & PCA Platform £4.2bn £2.5bn 29% 40% 1 OMW Investo
Slide 54: Growth drivers
OMW Investors Growth drivers Opportunities for future growth Distribution development • Recently launched Creation funds for advised and open market channels • OMI: New multi-asset proposition Product expansion (Compass) developed for the OMW owned Singapore distribution business (AAM) • Multi-asset
Slide 55: Key takeaways
OMW Investors Key takeaways A leader in the UK multi-asset solutions market Established, quality investment solutions offering supported by experienced team of professionals Strong market demand for modern investment solutions Focus on manufacturing investment solutions for customers of OMW
Slide 56: Quilter Cheviot
Quilter Cheviot Martin Baines 5 Star Rating Winner 5 Star Rating Wealth Manager Regional Stars DFM Bespoke Service Best Investment Manager – Charities Investment Provider Awards 2017 DFM Managed Portfolios Direct Best Balanced Portfolio – Climate Assets Fund FT Adviser Online Innovation & DFM Manage
Slide 57: Quilter Cheviot is a leading discretionary wealth manager
Quilter Cheviot Quilter Cheviot is a leading discretionary wealth manager Market growth and consistent NCCF supporting AuM Top 5 DFM with excellent fit within OMW’s model growth since acquisition¹ £bn CAGR +12% 22.5 17.2 £22.5bn AuM 530 staff serving over (H1 2017) 43,000 clients Feb 20151 H1 2017 1
Slide 58: Operating in an attractive, dynamic market in the UK
Quilter Cheviot Operating in an attractive, dynamic market in the UK £473bn discretionary wealth market growing at ~11% p.a. Diverse trends reshaping the industry £bn CAGR 77 Non-managed 9% • RDR driver of Investment management outsourcing by financial advisers 70 114 Advisory 1% • Industry consolid
Slide 59: Discretionary focus with strong local footprint
Quilter Cheviot Discretionary focus with strong local footprint Focus on core wealth management services Strong regional footprint AuM by service AuM by region Other1 Advisory managed 7% Dublin 11% Glasgow 3% 7% 3% 3% Liverpool 5% AuM Bristol 5% AuM 54% London 93% 9% Jersey 10% 93% Discretionary (DP
Slide 60: Diverse sourcing of clients
Quilter Cheviot Diverse sourcing of clients AuM/NCCF by channel1 Stable client base and persistency AuM NCCF Persistency2 8% 8% Direct Financial Adviser 93% 91% 91% 41% 33% 29% 44% AuM 56% 92% NCCF 59% 71% 92% 67% 2015 2016 H1 2017 (annualised) Strengths of the Quilter Cheviot franchise Business dev
Slide 61: A leading choice among third party financial advisers
Quilter Cheviot A leading choice among third party financial advisers Regional financial adviser footprint Highlights • Established presence since early 2000s • Relationships with over 2,500 third party advisers nationwide • Dedicated team of 20 Business Development Managers focused on financial adv
Slide 62: Above benchmark returns and quality service
Quilter Cheviot Above benchmark returns and quality service Consistent outperformance vs. peers... …underpinned by a strong investment process… Quilter Cheviot PCI Quartile Ranking in ARC Private Client Index 1,2 • Investment proposition defined by a firm-wide 1Y 3Y 5Y 10Y investment framework with
Slide 63: Quilter Cheviot's contribution within OMW
Quilter Cheviot Quilter Cheviot’s contribution within OMW Integrated flows into Quilter Cheviot expected to grow 1 Intrinsic clients AuM managed by Quilter Cheviot Advised channel £bn 0.4 0.2 0.2 H1 2016 H2 2016 H1 2017 2 Intrinsic PCA PCA clients AuM managed by Quilter Cheviot £bn 0.3 1 2 0.1 0.0 Q
Slide 64: Strong asset growth driving revenues
Quilter Cheviot Strong asset growth driving revenues Absorbing revenue margin decline AuM Revenue margin1 £bn bps +17% +16% 21 22 80 77 74 18 19 FY 2015 Dec-15 FY 2016 Dec-16 H1 2016 Jun-16 H1 2017 Jun-17 FY 2015 FY 2016 H1 2017 Revenue Factors impacting revenue margin £m • Post RDR loss of trail an
Slide 65: Growth drivers
Quilter Cheviot Growth drivers Opportunities for future growth Recruit and expand regional footprint • Add to regional footprint IT re-platforming • Targeted IM and BD recruitment benefits • Opportunistic inorganic • Expanded capabilities with growth of small books Quilter Cheviot discretionary port
Slide 66: Key takeaways
Quilter Cheviot Key takeaways Leading discretionary investment management business Strong track record of consistent positive net flows driving AuM growth Attractive and stable financial profile – persistency of client assets Growth opportunity arising from build out of PCA Discretionary m
Slide 67: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 68: Old Mutual Wealth
QQ OLDMUTUAL WEALTH
Slide 69: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 70: Agenda
CONFIDENTIAL Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin Int
Slide 71: Wealth Platforms: significant benefits of open market channel
Wealth Platforms Wealth Platforms: significant benefits of open market channel Allows customer and adviser choice Open Market NCCF1 Open Market channel H1 2017 £bn 2.1 Integrated 3rd party 0.5 Third party independent advisers Quilter Third party OMW Investors funds Cheviot 1.6 0.4 Wealth Platforms U
Slide 72: Wealth Platforms: our experienced leadership
Wealth Platforms Wealth Platforms: our experienced leadership Steven Levin UK Platform CAGR • Appointed CEO of the UK Platform & Heritage AuA1 £bn +21% business in October 2015 45.9 • Over 19 years’ experience in the financial 34.5 services industry FY 2015 Dec-15 H1 2017 Jun-17 Peter Kenny Internat
Slide 73: UK Platform and Heritage
UK Platform and Heritage Steven Levin Best Platform Platinum rating 2017 2017 Professional Paraplanner Advisor Asset Platform 5 star rating 4 Star – Life and Pensions Gold rating Awards Rating 2017 5 Star – Investment 2016 - Platform FT Advisor Online 2016 2016 - Pension Innovation and Service Finan
Slide 74: Heritage business has stable AuA but in run-off
UK Platform and Heritage Heritage business has stable AuA but in run-off Overview Business in run-off H1 2017 AuA # Policyholders NCCF / Open AuA FY 2015 FY 2016 H1 2017 Future p.a. runoff3 Heritage outflows (12%) (11%) (13%) c. (15%) • Onshore bonds: (excl. Institutional) Legacy • Onshore bonds1: 6
Slide 75: Strategic priorities to manage value through run-off process
UK Platform and Heritage Strategic priorities to manage value through run-off process Strategic priorities Key considerations • Provide good customer outcomes and optimise • Thematic review of our Heritage business still value of business underway, we continue to be transparent proactive and respons
Slide 76: Platforms play important role in modern wealth management
UK Platform and Heritage Platforms play important role in modern wealth management What we do for our advisers and customers Platforms Tools Valuations Risk Profiling Customers Advisers Tax wrappers Technical support Commercial Custodian Trading terms Deliver to customers Deliver to advisers Platfor
Slide 77: The UK platform market is an attractive segment
UK Platform and Heritage The UK platform market is an attractive segment Significant growth in assets under administration AuA development over time Platform market highlights £bn CAGR +22% 539 489 2 113 D2C £539bn AuA on £322bn AuA in retail 401 102 Platforms advised market 1 78 104 Corporate 93 74
Slide 78: OMW has a top three position in UK platform market
UK Platform and Heritage OMW has a top three position in UK platform market Well placed to take advantage of market opportunity UK Platform vs competitors (Top 5)1 Retail Advised AuA £bn (H1 2017) Total Retail advised NCCF £bn (Q2 2017) Standard Life 49.2 Standard Life 1.8 UK Platform 47.1 Aviva 1.5
Slide 79: Continued platform revenue growth opportunity despite margin headwinds
UK Platform and Heritage Continued platform revenue growth opportunity despite margin headwinds Pricing pressure compensated for by margin earned in integrated model and through scale benefits OMW UK Platform revenues continue to grow1 Revenue margin headwinds Revenue £m Impact of FCA-driven sunset
Slide 80: Pensions are the largest part of the UK Platform business
UK Platform and Heritage Pensions are the largest part of the UK Platform business Fastest growing part of platform market post-pension freedom Platform product breakdown Sources of Platform NCCF AuA H1 2017 £bn Platform NCCF £bn Onshore Bond 67% 82% 86% 86% % Pension flows 8% 2.8 2.7 1 GIA 0.5 20%
Slide 81: Benefits of UK Platform for OMW customers
UK Platform and Heritage Benefits of UK Platform for OMW customers Over four hundred thousand customers Platform customers Benefits to end customers • Average case size has risen from Customer £76k (2013) to £112k (H1 2017) 1. Easy to use platform tools and online access case size 2. Clear, competit
Slide 82: Platform supports restricted and independent advisers
UK Platform and Heritage Platform supports restricted and independent advisers Advised channel Open Market channel 4,000+ Independent Active Advisers 1,582 Restricted Advisers Platform of choice1,2 29% of net investment flows onto Top 300 Firms represent UK Platform from OMW Advice around half of Au
Slide 83: Why advisers use UK Platform
UK Platform and Heritage Why advisers use UK Platform Reputation for excellent customer service and technical support Provides tools, support and technology to help advisers drive efficiencies Strong team of technical specialists helping advisers across the country Flexible products, trusts an
Slide 84: UK Platform's contribution to OMW
UK Platform and Heritage UK Platform’s contribution to OMW 1 Restricted Advice1,2 H1 2017 UK Platform NCCF UK Platform AuA Advised Open Market channel channel Restricted 8% Restricted Advice Advice 29% £2.1bn £45.9bn 71% 92% Third party independent Restricted advisers advisers Independent Independen
Slide 85: IT re-platforming on track and on budget
UK Platform and Heritage IT re-platforming on track and on budget Modernising the UK Platform and enhancing our proposition Progress: Strong foundations laid Strategic rationale Programme • Modernise technology, update manual functionality establishment June – July 2017 and 1st level Complete • Expa
Slide 86: Re-platforming will significantly expand OMW offering
UK Platform and Heritage Re-platforming will significantly expand OMW offering Building on our key strengths and filling proposition gaps Current platform New platform GIA ISA • Retain differentiators such as easy to use online portal and Personal pension rebate mechanism allowing us Ons
Slide 87: Growth drivers
UK Platform and Heritage Growth drivers Opportunities for future growth Re-engage open market distribution Platform transformation • Increase number of primary programme adviser relationships Underlying market growth • Attract new third party • Increased product advisers not currently using UK capab
Slide 88: Key takeaways
UK Platform and Heritage Key takeaways Heritage strong profit and cash generative but in run-off, FCA review still to be resolved Platforms central to modern UK wealth management proposition Pension Freedom driving flows onto Platform Customer service and strong adviser relations maintain ma
Slide 89: International
International Peter Kenny Winner Best Advice / Winner Best Advice / Winner Best Single Premium Customer Support Customer Support / Investment Product Service Service 2017 - Singapore 2017 - UK Offshore 2017 - Europe International Advisor International Advisor International Advisor International Life
Slide 90: Overview of Old Mutual International
International Overview of Old Mutual International Business overview H1 2017 International presence £17.8bn AuA £0.4bn NCCF 50k Portfolio bond policies1 UNITED KINGDOM REPUBLIC OF 95% customers have an adviser IRELAND c. 700 staff globally EUROPE HONG KONG KPIs SINGAPORE FY 2015 FY 2016 H1
Slide 91: International business provides diversification benefits
International International business provides diversification benefits and products for International and UK customers Supporting UK customers’ Leveraging offering to selected non-UK customers international needs AuA H1 2017 International UK HNW Non-UK HNW customers Intl. HNW 13% UK Res. Cross 28% B
Slide 92: Serves broad customer base with single portfolio bond product
International Serves broad customer base with single portfolio bond product 62% OMW Investors UK Residents 5% UK Expats UK HNW Personal Quilter Cheviot Portfolio <1% 38% Bond International HNW International Expats 3rd party funds & Cross Border other investments 94% 92 Note: % denotes proportion of
Slide 93: Tax efficiency, portability and security
International Tax efficiency, portability and security Gross roll up UK Residents Tax efficiency 5% p.a. tax free withdrawal Tax deferment As above Tax efficiency & UK Expats Multi-currency, multi-jurisdictional portability Investment platform UK HNW Security Estate planning (intergene
Slide 94: Single premium product with premium charging structure
International Single premium product with premium charging structure Products primarily sold on premium Revenues not fully correlated to equity charging basis market performance Total revenue contribution FY 20161 Total revenues £m 123 Market value 115 charging Total 43% 64 61 revenue contribution 5
Slide 95: Focusing on core markets with deeper roots
International Focusing on core markets with deeper roots Actions to focus market activity Market position in core markets • Historically broad, geographical footprint United Kingdom • #4 in UK flows (18% share H1 2017)2 • Ongoing review of business acceptance framework Singapore • #1 in Single Premi
Slide 96: Focus on customer service and control framework
International Focus on customer service and control framework Customer Service Risk and Control Management Regional Office structure - supporting Robust processes and controls to Customers and advisors in the same time mitigate against Financial Crime Risk zone, language and culture Enhanced d
Slide 97: Strategic priorities in increasingly regulated market environment
International Strategic priorities in increasingly regulated market environment Integration and efficiency Focus on markets and • Better leverage OMW UK- segments owned distribution • Improve operational • Concentrated offering in efficiency Regulatory core markets • Further integration with develop
Slide 98: Key takeaways
International Key takeaways Clear focus on current customer segments in fewer regulated markets Scalable business with a core product offering which has broad appeal to our chosen customer segments Revenue model that is resilient in downward markets Business offers geographic and economic di
Slide 99: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 100: Old Mutual Wealth
QQ OLDMUTUAL WEALTH
Slide 101: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 102: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 103: Financial highlights
Financials Financial highlights Resegmentation of business announced today Track record of growing revenue through increasing AuA and AuM Relative margin stability from diversity of model Near term fixed cost increases through separating from OM plc However, further work to be done to impr
Slide 104: Reduced number of segments moving forward
Financials Reduced number of segments moving forward Simplifying disclosure to align with future wealth model A B Advice & Wealth New segments Wealth Platforms Corporate HO Other Management H1 2017 AuM1 : £38bn2 H1 2017 AuA1 : £79bn H1 2017 AuM1: £23bn Old segments Change from Advice OMGI Single pre
Slide 105: Key metrics split by segment excluding Single strategy
Financials Key metrics split by segment excluding Single strategy Higher revenue growth in A&WM, higher AOP in Wealth Platforms A B Corporate HO and Advice & Wealth Wealth Platforms intra-group OMW1 Management eliminations H1 2017 AuMA £ bn1 38 79 (10) 107 YoY Growth 30% 19% 21% H1 2017 NCCF £ bn1 2
Slide 106: Q3 net flows update – excluding single strategy
Financials Q3 net flows update – excluding single strategy £0.5bn £0.4bn £0.5bn £0.8bn £1.1bn £1.2bn £1.4bn Integrated flows (excl. Heritage) 1.9 1.1 1.3 1.2 0.6 Wealth Platforms1 1.0 0.8 0.7 0.8 0.9 0.4 0.6 0.5 1.2 1.3 Advice & Wealth Management 0.6 0.8 0.6 0.3 0.2 0.3 -0.1 0.0 0.0 -0.3 -0.4 -0.5 -
Slide 107: Advice and Wealth Management revenue drivers
Financials Advice and Wealth Management revenue drivers Growing advisers and flows into OMW Investors and Quilter Cheviot FY 2015 FY 2016 H1 2016 H1 2017 Key takeaway Advice RFPs + PCA # 1,230 1,423 1,340 1,582 • Growing advisers 1 Productivity £m 0.9 0.9 0.7 1.6 • Productivity increasing Advice rev
Slide 108: Advice and Wealth Management revenue drivers
Financials Advice and Wealth Management revenue drivers Growing advisers and flows into OMW Investors and Quilter Cheviot FY 2015 FY 2016 H1 2016 H1 2017 Key takeaway Advice RFPs + PCA # 1,230 1,423 1,340 1,582 • Growing advisers 1 Productivity £m 0.9 0.9 0.7 1.6 • Productivity increasing Advice rev
Slide 109: Advice and Wealth Management revenue drivers
Financials Advice and Wealth Management revenue drivers Growing advisers and flows into OMW Investors and Quilter Cheviot FY 2015 FY 2016 H1 2016 H1 2017 Key takeaway Advice RFPs + PCA # 1,230 1,423 1,340 1,582 • Growing advisers 1 Productivity £m 0.9 0.9 0.7 1.6 • Productivity increasing Advice rev
Slide 110: Advice and Wealth Management revenue summary
Financials Advice and Wealth Management revenue summary FY 2015 FY 2016 H1 2016 H1 2017 Revenue Margin bps 68 66 68 64 NCCF £bn 1.7 1.6 0.6 2.1 AuM £bn 27.6 +19% 32.8 29.1 +30% 37.81 Full Year Revenues Half Year Revenues +21% 253 Revenue £m 209 +21% 148 122 FY2015 2015 FY 2016 H1 2016 H1 2017 110 1.
Slide 111: Wealth Platforms revenue drivers
Financials Wealth Platforms revenue drivers Strong asset growth and stable NCCF FY 2015 FY 2016 H1 2016 H1 2017 Key takeaway UK Platform NCCF £bn 2.7 2.8 1.4 2.1 • Continued NCCF even with limited product capabilities AuA £bn 34.5 41.4 36.5 45.9 • Revenue supported by scale benefits Revenue margin b
Slide 112: Wealth Platforms revenue drivers
Financials Wealth Platforms revenue drivers Strong asset growth and stable NCCF FY 2015 FY 2016 H1 2016 H1 2017 Key takeaway UK Platform NCCF £bn 2.7 2.8 1.4 2.1 • Continued NCCF even with limited product capabilities AuA £bn 34.5 41.4 36.5 45.9 • Revenue supported by scale benefits Revenue margin b
Slide 113: Wealth Platforms revenue drivers
Financials Wealth Platforms revenue drivers Strong asset growth and stable NCCF FY 2015 FY 2016 H1 2016 H1 2017 Key takeaway UK Platform NCCF £bn 2.7 2.8 1.4 2.1 • Continued NCCF even with limited product capabilities AuA £bn 34.5 41.4 36.5 45.9 • Revenue supported by scale benefits Revenue margin b
Slide 114: Wealth Platforms revenue summary
Financials Wealth Platforms revenue summary FY 2015 FY 2016 H1 2016 H1 2017 Revenue Margin1 bps 56 49 50 44 NCCF £bn 2.4 2.2 1.2 2.0 AuM £bn 63.8 +16% 73.7 66.8 +19% 79.2 Full Year Revenues Half Year Revenues +4% Revenue £m 378 392 +5% 188 197 FY 2015 2015 FY2016 2016 H1 2016 H1 2017 114 1. AuA-base
Slide 115: Bringing together the OMW model
Financials Bringing together the OMW model H1 2017 NCCF1 £bn 1.0 3.7 2.0 2.7 Included in £1.1bn flow Advice to OMW Investors 1 0.2 2.3 0.4 0.5 1.1 0.5 Advice Advice to Platform Advice & Total QC Direct Integrated Platform to Eliminations Total net to OMW Platform to OMW Platforms Integrated & Manage
Slide 116: OMW: top line continuing to grow strongly driven by A&WM segment
Financials OMW: top line continuing to grow strongly driven by A&WM segment Full Year Revenues (£m) Half Year Revenues £m Revenue £m 64 59 margin 60 54 bps +10% 646 587 YOY% 253 A&WM +21% 209 +11% 345 310 YOY% 148 A&WM +21% 123 378 392 WP +4% 188 197 WP +5% HO 0 1 H1 2016 Jun-16 H1 2017 Jun-17 FY 20
Slide 117: OMW: AOP profile reflects investment in business
Financials OMW: AOP profile reflects investment in business AOP pre-tax £m After: Business investment initiatives £5m £30m 213 208 101 96 FY 2015 FY 2016 H1 2016 H1 2017 117
Slide 118: Expense base adjusting for standalone future
Financials Expense base adjusting for standalone future Expenses Comments £m Over the last two years, expenses have grown YOY% at a higher pace than revenues, driven by: +17% 438 • Investments in business growth 18 374 • Increase in variable incentives HO 14 • Modernisation and transformation 194 YO
Slide 119: Sources of recent expense increases
Financials Sources of recent expense increases Growth in 2016 admin expenses £m 17% 4381 10% 25 413 5 14 Investment in Change to the business cost of 20 e.g. PCA, 374 Increase in executive Intrinsic variable management deferred incentives in team Expenses consideration, line with investment in drive
Slide 120: Managed separation and standalone future to further increase cost levels
Financials Managed separation and standalone future to further increase cost levels Illustrative costs on standalone perimeter (excl. OMGI single strategy) Comments £m 2017 expense growth H1 2017 expenses 250 • Investment in existing business e.g. MiFID II, GDPR X2 500 • Investment in new business i
Slide 121: Revenue and expense trends
Financials Revenue and expense trends Successfully delivered growing revenues… …but cost growth exceeding revenue growth £m £m 646 587 253 209 438 374 345 310 194 148 A&WM 157 249 123 209 378 392 114 A&WM 95 202 226 WP 188 197 WP 106 123 HO 1 14 18 8 12 3 FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2
Slide 122: Opportunity to improve operating margins
Financials Opportunity to improve operating margins Modest improvement in operating margin targeted over time Advice & Wealth Management Wealth Platforms OMW Expense 65 66 66 33 34 32 45 49 49 Margin (bps) 47% 42% 37% 36% 32% 28% Operating 25% 23% 23% Margin % FY 2015 FY 2016 H1 2017 FY 2015 FY 2016
Slide 123: Day 1 balance sheet: strong capital and liquidity position
Financials Day 1 balance sheet work continues: focus is on having a strong capital and liquidity position Well-capitalised operating Cash buffers held at holding Prudent leverage level companies company level • Solvency II entities well- Cash buffers intended to: • Prudent leverage, additional capit
Slide 124: OMW cash generation & future uses of cash
Financials OMW cash generation & future uses of cash Cash generation Uses of cash Solvency II entities ICAAP Entities Drivers supporting cash position • UK Platform (part) • Advice • Heritage • OMW Investors Interest • Prudent balance sheet leverage • International • Quilter Cheviot • UK Platform (p
Slide 125: Key takeaways
Financials Key takeaways Track record of growing revenue through increasing AuA and AuM Diversity of model expected to support relative future margin stability Ongoing fixed cost increases through separating from OM plc Improve cross business optimisation as OMW matures Well capitalised –
Slide 126: Agenda
Agenda Introduction Bruce Hemphill Strategic Overview Paul Feeney Advice & Wealth Management Paul Feeney Advice Andy Thompson OMW Investors Paul Simpson Quilter Cheviot Martin Baines Wrap-up and Q&A Paul Feeney Break Wealth Platforms Paul Feeney UK Platform and Heritage Steven Levin International Pe
Slide 127: Quilter multi-channel full service wealth model is different
Wrap-up Quilter multi-channel full service wealth model is different Designed for customer choice Advised channel Open Market channel Customers Advised: 200k+ Customers: 700k+ Develop suitable Restricted Advice Third Party Independent Advice Financial Advice financial plans 1,582 advisers 4,000+ act
Slide 128: What you heard today
Wrap-up What you heard today To become the leading UK wealth business through sound financial advice, Strategy wrapped in quality products and service with suitable investment solutions Purpose built, full service wealth manager delivering good customer outcomes Leading positions across one of t
Slide 129: Quilter
Quilter
Slide 130: Appendix
Appendix NEW BRAND 130
Slide 131: Sources of earnings: new segments
Appendix Sources of earnings: new segments H1 2016 & H1 2017 Advice & Corporate HO Wealth Wealth / Intragroup Sub-total Other2 Total Reported Platforms Management eliminations H1 2017 £m Revenues 148 197 - 345 98 443 Expenses (114) (123) (12) (249) (60) (309) AOP pre-tax 34 74 (12) 96 38 134 £bn AuM
Slide 132: Sources of earnings: new segments
Appendix Sources of earnings: new segments FY 2015 & FY 2016 Advice & Corporate HO Wealth Wealth / Intragroup Sub-total Other2 Total Reported Platforms Management eliminations 2016 £m Revenues 253 392 1 646 178 824 Expenses (194) (226) (18) (438) (126) (564) AOP pre-tax 59 166 (17) 208 52 260 £bn Au
Slide 133: Financials Reconciliation: OMW
Appendix Financials Reconciliation: OMW NCCF and AuMA NCCF £bn AuMA £bn FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 1 1 Reported – SOE 6.9 5.2 3.2 4.9 Reported – SOE 104 124 111 127 Adjustments Adjustments Perimeter (3) (1.9) (1.6) (1.7) Perimeter (19) (26) (22) (20) OMGI Single
Slide 134: Financials Reconciliation: OMW
Appendix Financials Reconciliation: OMW Revenues to AOP pre-tax Revenues £m Expenses £m AOP pre-tax £m FY FY H1 H1 FY FY H1 H1 FY FY H1 H1 2015 2016 2016 2017 2015 2016 2016 2017 2015 2016 2016 2017 Reported – SOE1 752 810 366 441 Reported – SOE1 468 564 265 309 Reported – SOE1 307 260 104 134 PHT a
Slide 135: Financials Reconciliation: Advice & Wealth Management
Appendix Financials Reconciliation: Advice & Wealth Management NCCF and AuMA NCCF £m AuM £bn FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 1 1 Reported – SOE Reported – SOE UK Other 0.3 -0.2 0.1 - UK Other 6 7 7 8 QC 1 0.8 0.4 0.6 QC 18 21 19 22 OMGI 3.5 2.4 1.6 3.3 OMGI 25 31 27 3
Slide 136: Financials Reconciliation: Advice & Wealth Management
Appendix Financials Reconciliation: Advice & Wealth Management Revenues to AOP pre-tax Revenues £m Expenses £m AOP £m FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 Reported – SOE1 Reported – SOE1 Reported – SOE1 UK Other 74 91 40 47 UK Other 57 85 38
Slide 137: Financials Reconciliation: Wealth Platforms
Appendix Financials Reconciliation: Wealth Platforms NCCF and AuMA NCCF £bn AuA £bn FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 Reported – SOE¹ Reported – SOE¹ UK Platform 2.7 2.8 1.4 2.1 UK Platform 34 41 37 46 International 0.7 0.7 0.2 0.4 International 16 19 17 18 Heritage (1.
Slide 138: Financials Reconciliation: Wealth Platforms
Appendix Financials Reconciliation: Wealth Platforms Revenues £m Expenses £m AOP £m FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 FY 2015 FY 2016 H1 2016 H1 2017 Reported – SOE1 Reported – SOE1 Reported – SOE1 UK Platform 127 132 63 75 UK Platform 104 113 52 58 UK Platform 33 27 14
Slide 139: Financial information basis of preparation
Appendix Financial information basis of preparation As part of the prospectus disclosures, Old Mutual Wealth (OMW) is required to include a full three year track record of historical financial information on a consolidated basis. As OMW has been reported as a segment in the Old Mutual plc annual rep
Slide 140: Glossary – key terms and acronyms
Appendix Glossary – key terms and acronyms Term Definition AOP Adjusted Operating Profit AuA Assets under Administration AuM Assets under Management AUMA Assets under Management & Administration BD Business development BU Business Unit D2C Direct to customer DB Define Benefit DPS Discretionary Portf
Slide 141: Glossary – key terms and acronyms (continued)
Appendix Glossary – key terms and acronyms (continued) Term Definition MCEV Market Consistent Embedded Value MiFID 2 Markets in Financial Instruments Directive MPS Managed Portfolio Service NAV Net Asset Value NCCF Net client cash flows, NCCF is net difference between money received from customers a