Quilter plc - Full Year 2024 Results - Part 2

About this update from Quilter Plc

[{"type":"text","content":"\n \n Statement of Directors' responsibilities \n in respect of the preliminary announcement of the Annual Report and the financial statements \n The Directors confirm that, to the best of their knowledge: \n ·      The results in this preliminary announcement have been taken from the Group's 2024 Annual Report, which will be available on the Company's website on 20 March 2025; and \n ·      The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group \n   \n   \n Signed on behalf of the Board \n   \n   \n   \n Steven Levin                                           Mark Satchel Chief Executive Officer                         Chief Financial Officer \n 5 March 2025 \n \n \n \n \n \n Consolidated statement of comprehensive income \n \n \n \n \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n £m \n \n \n \n \n \n \n \n \n \n \n Year ended \n   \n \n \n Year ended \n   \n   \n \n \n \n \n   \n \n \n Notes \n \n \n 31 December \n 2024 \n \n \n 31 December 2023 \n \n \n \n \n Income \n \n \n \n \n \n \n \n \n \n \n \n \n \n Fee income and other income from service activities \n \n \n \n \n \n 544 \n \n \n 542 \n \n \n \n \n Investment return \n \n \n \n \n \n 4,877 \n \n \n 4,075 \n \n \n \n \n Other income \n \n \n \n \n \n 28 \n \n \n 9 \n \n \n \n \n Total income \n \n \n \n \n \n 5,449 \n \n \n 4,626 \n \n \n \n \n Expenses \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Change in investment contract liabilities \n \n \n 15 \n \n \n (4,065) \n \n \n (3,313) \n \n \n \n \n Fee and commission expenses and other acquisition costs \n \n \n \n \n \n (49) \n \n \n (49) \n \n \n \n \n Change in third-party interests in consolidated funds \n \n \n \n \n \n (587) \n \n \n (579) \n \n \n \n \n Other operating and administrative expenses \n \n \n \n \n \n (691) \n \n \n (575) \n \n \n \n \n Finance costs \n \n \n \n \n \n (21) \n \n \n (22) \n \n \n \n \n Total expenses \n \n \n \n \n \n (5,413) \n \n \n (4,538) \n \n \n \n \n Impairment of investments in associates \n \n \n \n \n \n (1) \n \n \n - \n \n \n \n \n Profit before tax \n \n \n \n \n \n 35 \n \n \n 88 \n \n \n \n \n Income tax expense attributable to policyholder returns \n \n \n 7(a) \n \n \n (95) \n \n \n (76) \n \n \n \n \n (Loss)/profit before tax attributable to shareholder returns \n \n \n \n \n \n (60) \n \n \n 12 \n \n \n \n \n   Income tax expense \n \n \n 7(a) \n \n \n (69) \n \n \n (46) \n \n \n \n \n   Less: income tax expense attributable to policyholder returns \n \n \n \n \n \n 95 \n \n \n 76 \n \n \n \n \n Income tax credit attributable to shareholder returns \n \n \n 7(a) \n \n \n 26 \n \n \n 30 \n \n \n \n \n (Loss)/profit after tax attributable to the owners of the Company \n \n \n \n \n \n (34) \n \n \n 42 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Other comprehensive expense \n \n \n \n \n \n \n \n \n \n \n \n \n \n Exchange losses on translation of foreign operations \n \n \n \n \n \n (1) \n \n \n - \n \n \n \n \n Total comprehensive income \n \n \n \n \n \n (35) \n \n \n 42 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Earnings per Ordinary Share \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Basic earnings per Ordinary Share (pence) \n \n \n 8 \n \n \n (2.5) \n \n \n 3.1 \n \n \n \n \n Diluted earnings per Ordinary Share (pence) \n \n \n 8 \n \n \n (2.5) \n \n \n 3.1 \n \n \n \n \n   \n All income and expenses relate to continuing operations. \n \n \n   \n \n \n \n \n Consolidated statement of financial position \n \n \n \n \n At 31 December 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n £m \n \n \n \n \n \n \n \n Notes \n \n \n 31 December \n 2024 \n \n \n 31 December \n 2023 \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Goodwill and intangible assets \n \n \n 9 \n \n \n 339 \n \n \n 372 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n 91 \n \n \n 91 \n \n \n \n \n Investment property \n \n \n \n \n \n 9 \n \n \n 10 \n \n \n \n \n Investments in associates \n \n \n \n \n \n 16 \n \n \n 2 \n \n \n \n \n Contract costs \n \n \n \n \n \n 24 \n \n \n 16 \n \n \n \n \n Loans and advances \n \n \n \n \n \n 56 \n \n \n 38 \n \n \n \n \n Financial investments \n \n \n 10 \n \n \n 59,360 \n \n \n 50,329 \n \n \n \n \n Deferred tax assets \n \n \n \n \n \n 115 \n \n \n 91 \n \n \n \n \n Current tax receivable \n \n \n \n \n \n 45 \n \n \n 33 \n \n \n \n \n Trade, other receivables and other assets \n \n \n \n \n \n 418 \n \n \n 447 \n \n \n \n \n Derivative assets \n \n \n \n \n \n 26 \n \n \n 57 \n \n \n \n \n Cash and cash equivalents \n \n \n 13 \n \n \n 1,949 \n \n \n 1,859 \n \n \n \n \n Total assets \n \n \n   \n \n \n 62,448 \n \n \n 53,345 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Equity and liabilities \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Equity \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Ordinary Share capital \n \n \n 14 \n \n \n 115 \n \n \n 115 \n \n \n \n \n Ordinary Share premium reserve \n \n \n \n \n \n 58 \n \n \n 58 \n \n \n \n \n Capital redemption reserve \n \n \n \n \n \n 346 \n \n \n 346 \n \n \n \n \n Share-based payments reserve \n \n \n \n \n \n 42 \n \n \n 42 \n \n \n \n \n Other reserves \n \n \n   \n \n \n (1) \n \n \n - \n \n \n \n \n Retained earnings \n \n \n   \n \n \n 863 \n \n \n 958 \n \n \n \n \n Total equity \n \n \n   \n \n \n 1,423 \n \n \n 1,519 \n \n \n \n \n Liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Investment contract liabilities \n \n \n 15 \n \n \n 51,758 \n \n \n 43,396 \n \n \n \n \n Third-party interests in consolidated funds \n \n \n \n \n \n 8,225 \n \n \n 7,444 \n \n \n \n \n Provisions \n \n \n 16 \n \n \n 111 \n \n \n 46 \n \n \n \n \n Deferred tax liabilities \n \n \n \n \n \n 96 \n \n \n 64 \n \n \n \n \n Current tax payable \n \n \n \n \n \n 1 \n \n \n 2 \n \n \n \n \n Borrowings and lease liabilities \n \n \n \n \n \n 275 \n \n \n 279 \n \n \n \n \n Trade, other payables and other liabilities \n \n \n \n \n \n 506 \n \n \n 570 \n \n \n \n \n Derivative liabilities \n \n \n \n \n \n 53 \n \n \n 25 \n \n \n \n \n Total liabilities \n \n \n   \n \n \n 61,025 \n \n \n 51,826 \n \n \n \n \n Total equity and liabilities \n \n \n   \n \n \n 62,448 \n \n \n 53,345 \n \n \n \n \n Approved by the Board of Directors and authorised for issue on 5 March 2025 and signed on its behalf by: \n   \n   \n   \n Steven Levin                         Mark Satchel \n Chief Executive Officer         Chief Financial Officer \n   \n   \n \n   \n \n \n \n \n Consolidated statement of changes in equity \n \n \n \n \n For the year ended 31 December 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n Year ended 31 December 2024 \n \n \n \n \n \n Ordinary \n Share \n capital \n   \n \n \n Ordinary Share \n premium reserve \n \n \n Capital redemption reserve \n \n \n Share-based payments reserve \n \n \n Other reserves \n \n \n Retained earnings \n \n \n Total \n share- \n holders' \n equity \n \n \n \n \n Balance at 1 January 2024 \n \n \n   \n \n \n 115 \n \n \n 58 \n \n \n 346 \n \n \n 42 \n \n \n - \n \n \n 958 \n \n \n 1,519 \n \n \n \n \n Loss after tax attributable to the owners of the Company \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (34) \n \n \n (34) \n \n \n \n \n Other comprehensive expense \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n \n \n Total comprehensive income \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1) \n \n \n (34) \n \n \n (35) \n \n \n \n \n Dividends \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (73) \n \n \n (73) \n \n \n \n \n Exchange rate movements (ZAR/GBP) 1 \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1) \n \n \n (1) \n \n \n \n \n Movement in own shares \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (6) \n \n \n (6) \n \n \n \n \n Equity-settled share-based payment transactions \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n (4) \n \n \n - \n \n \n 18 \n \n \n 14 \n \n \n \n \n Aggregate tax effects of items recognised directly in equity \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n 4 \n \n \n - \n \n \n 1 \n \n \n 5 \n \n \n \n \n Total transactions with the owners of the Company \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (61) \n \n \n (61) \n \n \n \n \n Balance at 31 December 2024 \n \n \n   \n \n \n 115 \n \n \n 58 \n \n \n 346 \n \n \n 42 \n \n \n (1) \n \n \n 863 \n \n \n 1,423 \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n Year ended 31 December 2023 \n \n \n \n \n \n Ordinary \n Share \n capital \n \n \n Ordinary Share \n premium reserve \n \n \n Capital redemption reserve \n \n \n Share-based payments reserve \n \n \n Other reserves \n \n \n Retained earnings \n \n \n Total \n share- \n holders' \n equity \n \n \n \n \n Balance at 1 January 2023 \n \n \n \n \n \n 115 \n \n \n 58 \n \n \n 346 \n \n \n 41 \n \n \n (1) \n \n \n 989 \n \n \n 1,548 \n \n \n \n \n Total comprehensive income 2 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 42 \n \n \n 42 \n \n \n \n \n Dividends \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (65) \n \n \n (65) \n \n \n \n \n Exchange rate movements (ZAR/GBP) 1 \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2 \n \n \n 2 \n \n \n \n \n Acquisition of own shares 3 \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (14) \n \n \n (14) \n \n \n \n \n Movement in own shares \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (13) \n \n \n (13) \n \n \n \n \n Equity-settled share-based payment transactions \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 18 \n \n \n 18 \n \n \n \n \n Aggregate tax effects of items recognised directly in equity \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n 1 \n \n \n - \n \n \n - \n \n \n 1 \n \n \n \n \n Total transactions with the owners of the Company \n \n \n - \n \n \n - \n \n \n - \n \n \n 1 \n \n \n - \n \n \n (72) \n \n \n (71) \n \n \n \n \n Transfer to retained earnings \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1 \n \n \n (1) \n \n \n - \n \n \n \n \n Balance at 31 December 2023 \n \n \n \n \n \n 115 \n \n \n 58 \n \n \n 346 \n \n \n 42 \n \n \n - \n \n \n 958 \n \n \n 1,519 \n \n \n \n \n 1 For shares registered on the Johannesburg Stock Exchange, the amounts of proposed dividends are set in South African Rand on the relevant Market Announcement date which is prior to the date of payment. The impact of exchange rate movements between these dates is recognised directly in equity. The Group held cash in South African Rand equal to the expected cash outflows and therefore was economically hedged for these payments. \n 2 The total comprehensive income in 2023 was equal to profit after tax attributable to the owners of the Company. \n 3 In November 2023, as a result of an Odd-lot Offer, Quilter plc purchased 15,798,423 of its own Ordinary Shares for £14 million. Those shares were gifted to the Employee Benefit Trust and subsequently held as treasury shares. \n   \n \n Consolidated statement of cash flows \n For the year ended 31 December 2024 \n The cash flows presented in this statement cover all the Group's activities and include flows from both policyholder and shareholder activities. All cash and cash equivalents are available for general use by the Group for the purposes of the disclosures required under IAS 7 Statement of Cash Flows except for cash and cash equivalents in consolidated funds (as shown in note 13). \n \n \n \n \n \n \n \n   \n \n \n \n \n \n £m \n \n \n \n \n \n \n \n Notes \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Cash flows from operating activities \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n 4,654 \n \n \n 2,137 \n \n \n \n \n Taxation paid \n \n \n \n \n \n (69) \n \n \n (26) \n \n \n \n \n Total net cash flows from operating activities \n \n \n 13(b) \n \n \n 4,585 \n \n \n 2,111 \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Net purchases and sales of financial investments \n \n \n \n \n \n (4,360) \n \n \n (1,908) \n \n \n \n \n Purchase of property, plant and equipment \n \n \n \n \n \n (8) \n \n \n (1) \n \n \n \n \n Proceeds from sale of property, plant and equipment held for sale \n \n \n \n \n \n - \n \n \n 1 \n \n \n \n \n Acquisition of subsidiary \n \n \n \n \n \n (6) \n \n \n - \n \n \n \n \n Acquisition of shares in associates \n \n \n \n \n \n (14) \n \n \n (1) \n \n \n \n \n Total net cash flows from investing activities \n \n \n \n \n \n (4,388) \n \n \n (1,909) \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Dividends paid to the owners of the Company \n \n \n \n \n \n (73) \n \n \n (65) \n \n \n \n \n Exchange rate movements passed to shareholders 1 \n \n \n \n \n \n (1) \n \n \n 2 \n \n \n \n \n Finance costs on borrowings 2 \n \n \n \n \n \n (18) \n \n \n (18) \n \n \n \n \n Payment of interest on lease liabilities 2 \n \n \n \n \n \n (2) \n \n \n (3) \n \n \n \n \n Payment of principal of lease liabilities \n \n \n \n \n \n (8) \n \n \n (9) \n \n \n \n \n Quilter plc shares acquired under the Odd-lot Offer 3 \n \n \n \n \n \n - \n \n \n (14) \n \n \n \n \n Quilter plc shares acquired for use within the Group's employee share scheme \n \n \n \n \n \n (6) \n \n \n (15) \n \n \n \n \n Proceeds from the issue of subordinated debt \n \n \n \n \n \n - \n \n \n 199 \n \n \n \n \n Subordinated debt repaid \n \n \n \n \n \n - \n \n \n (200) \n \n \n \n \n Total net cash flows from financing activities \n \n \n 13(c) \n \n \n (108) \n \n \n (123) \n \n \n \n \n Net increase in cash and cash equivalents \n \n \n \n \n \n 89 \n \n \n 79 \n \n \n \n \n Cash and cash equivalents at the beginning of the year \n \n \n \n \n \n 1,859 \n \n \n 1,782 \n \n \n \n \n Effect of exchange rate changes on cash and cash equivalents \n \n \n \n \n \n 1 \n \n \n (2) \n \n \n \n \n Cash and cash equivalents at the end of the year \n \n \n 13(a) \n \n \n 1,949 \n \n \n 1,859 \n \n \n \n \n 1 The exchange rate movements passed to shareholders relate to foreign exchange gains or losses that have arisen on dividend payments to JSE shareholders. Further details are included within the consolidated statement of changes in equity. \n 2 The total interest paid during the year includes finance costs on borrowings and payment of interest on lease liabilities. \n 3 Further information relating to the Odd-lot Offer is included within the consolidated statement of changes in equity. \n   \n   \n \n \n Notes to the condensed consolidated financial statements \n For the year ended 31 December 2024 \n General information \n Quilter plc (the \"Company\"), a public limited company incorporated in England and Wales and domiciled in the United Kingdom (\"UK\"), together with its subsidiaries (collectively, the \"Group\") offers investment and wealth management services, long-term savings and financial advice primarily in the UK. Quilter plc is listed with a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange (\"JSE\"). \n The Company's registration number is 06404270. The address of the registered office is Senator House, 85 Queen Victoria Street, London, EC4V 4AB. \n 1: Basis of preparation \n The results in this preliminary announcement have been taken from the Group's 2024 Annual report which will be available on the Company's website on 20 March 2025. These condensed consolidated financial statements of Quilter plc for the year ended 31 December 2024 have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. \n These condensed consolidated financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments which are held at fair value, and are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates. \n Going concern \n The Directors have considered the resilience of the Group, its current financial position, the principal risks facing the business and the effectiveness of any mitigating strategies which are or could be applied. This included an assessment of capital and liquidity over a three-year planning period covering 2025 to 2027. This assessment incorporated a number of stress tests covering a broad range of scenarios, including economic and market shocks of up to 40% falls in equity markets, mass lapse events, new business growth scenarios and severe business interruption, equivalent to 1‑in‑50 and 1‑in‑200 year events. The assessment also considered the potential implications of the Skilled Person Review which could include the potential payment of remediation and associated administrative costs (see note 16). As part of the going concern assessment, the Group took into consideration the current position of the UK and global economy. The Group also considered how climate-related risks and opportunities affect operations, investment activities, advice and distribution, and their impact on specific projects and initiatives, estimates and judgements. Based on the assessment, the Directors believe that both the Group and Quilter plc have sufficient financial resources to continue in business for a period of at least 12 months from the date of approval of these financial statements and continue to adopt the going concern basis in preparing the Group and Parent Company financial statements. Further information is contained in the viability statement and going concern section of the Annual Report. \n Liquidity analysis of the statement of financial position \n The Group's statement of financial position is in order of liquidity. For each asset and liability line item, those amounts expected to be recovered or settled more than 12 months after the reporting date are disclosed separately in the notes to the consolidated financial statements. \n Critical accounting estimates and judgements \n The preparation of financial statements requires management to exercise judgement in applying the Group's material accounting policies and make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. The Board Audit Committee reviews these areas of judgement and estimates, and the appropriateness of material accounting policies adopted in the preparation of these financial statements. \n Critical accounting judgements \n The Group's critical accounting judgements are those made when applying its material accounting policies and that have the greatest effect on the net profit and net assets recognised in the Group's financial statements. \n Ongoing Advice Review \n In the preliminary results announcement on 6 March 2024, the Group committed to undertake a review of historical data and practices across the Appointed Representative firms in the Quilter Financial Planning network in relation to the provision of ongoing advice. Following discussion with the FCA, a Skilled Person was appointed in June 2024 to assess and provide a view to the FCA on whether the delivery of ongoing advice services by Appointed Representative firms in the Quilter Financial Planning network has been compliant with applicable regulatory requirements during the period from 1 January 2017 to 31 December 2023. Although the Skilled Person Review has not yet completed, it is well advanced, and the final report is expected to be submitted to the FCA in the second quarter of 2025. Subject to further discussions with the FCA that will occur following the Skilled Person Review, it is currently expected that some form of customer remediation will likely be required. Based on the results of the Skilled Person Review to date together with other evidence available, including consideration of the announcement made by the FCA on 24 February 2025 titled \"Ongoing financial advice services\", the Group has recognised a provision for a reasonable estimate of the costs of a potential customer remediation exercise, including both redress and administrative costs, based upon current assumptions as to a plausible customer remediation approach that may be followed. See notes 16 and 17 for further details of the provision and contingent liability (including assumptions made and uncertainties arising). The significant judgements are: \n ·      the precise period to be included within the scope of a potential remediation exercise; and \n ·      the proportion of customers, determined by reference to cohorts shown by the Skilled Person's sample to be at the highest likelihood of having not received the expected level of service from their adviser, to be involved within the scope of a potential remediation exercise. \n Critical accounting estimates \n The Group's critical accounting estimates involve the most complex or subjective assessments and assumptions, which have a significant risk of resulting in material adjustment to the net carrying amounts of assets and liabilities until those amounts are settled. Management uses its knowledge of current facts and circumstances and applies estimation and assumption setting techniques, that are aligned with relevant actuarial and accounting standards and guidance, to make predictions about future actions and events. Actual results may differ materially from those estimates. \n Ongoing Advice Review \n As set out above, based on the results to date of the Skilled Person Review together with other evidence available, the Group considers that a customer remediation exercise in relation to ongoing advice will likely be required to consider cases where the customer has been charged for ongoing advice services, and the adviser is unable to satisfactorily evidence the provision of those services. The Group currently expects to finalise the Skilled Person Review and undertake discussions with the FCA during the second quarter of 2025, to consider the form and methodology of this potential customer remediation exercise. Any such remediation exercise is currently expected to involve the population of customers who are at the highest likelihood of having not received the expected level of service from their adviser, based upon the results of the Skilled Person Review. Given that a customer remediation exercise will likely be required, the Group has considered the estimated costs. This includes estimates for refunds of fees previously charged and interest payable and the cost of the remediation exercise. While there are a number of outstanding contingencies and variables the Group has determined that a reasonable estimate can be made based on the information currently available and, as a result has recognised a provision (see notes 16 and 17). Following the initial draft results of the statistically reliable representative cohort of customers undertaken by the Skilled Person, an initial quantification of the potential financial impact of the approach to be followed can be reasonably estimated. In determining this provision, consideration has been given to a wide range of assumptions, drawing on data from the Skilled Person's results to date, previous experience of past business reviews, and the views of external specialists familiar with similar remediation exercises. The significant estimates in the calculation of the provision are: \n ·      extrapolation of the proportion of the Skilled Person's statistically significant sample where satisfactory evidence of servicing was not found, to the entire population of ongoing advice customers; \n ·      response rate for customers invited to engage in the potential remediation exercise; and \n ·      administrative costs to perform a potential remediation exercise, including costs associated with customer engagement and case reviews, which have been determined based upon experience from previous past business reviews performed by the Group, and assumptions on the number of customers who may be subject to the review process. \n Measurement of deferred tax \n The annual business planning process estimates future taxable profits based on estimated levels of assets under management and administration (\"AuMA\"), which are subject to a large number of factors including global stock market movements, related movements in foreign exchange rates, net client cash flows and estimates of expenses and other charges. The Business Plan, adjusted for known and estimated tax adjusting items, is used to determine the extent to which deferred tax assets are recognised. The Group assesses the recoverability of shareholder deferred tax assets based on estimated taxable profits over a five-year horizon and assesses policyholder deferred tax assets based on estimated investment growth over the medium term. To the extent that profit estimates extend beyond the normal three-year planning cycle, average profits over the final two years of the plan are used. This approach is considered reasonable based on historical profitability. Future profit projections show the majority of deferred tax assets being utilised over the next three years. Management has reassessed the sensitivity of the recoverability of deferred tax assets based on the latest forecast cash flows. \n Other principal estimates \n The Group's assessment of goodwill and intangible assets for impairment uses the latest cash flow forecasts from the Group's three-year Business Plan. These forecasts include estimates relating to equity market levels and growth in AuMA in future periods, together with levels of new business growth, net client cash flows, revenue margins, and future expenses and discount rates (see note 9). These forecasts take account of climate-‑related risks and other responsible business considerations. Management does not consider that the use of these estimates has a significant risk of causing a material adjustment to the carrying amount of the assets within the next financial year. \n 2: New standards, amendments to standards, and interpretations adopted by the Group \n The amendments to accounting standards in the table below became applicable for the current reporting period, with no material impact on the Group's results, financial position or disclosures or on those of the Parent Company. \n \n \n \n \n Adopted by the Group from \n \n \n Amendments to standards \n \n \n \n \n 1 January 2024 \n \n \n Amendments to IAS 1 Presentation of Financial Statements - classification of liabilities as current and non-current \n \n \n \n \n 1 January 2024 \n \n \n Amendments to IAS 1 Presentation of Financial Statements - non-current liabilities with covenants \n \n \n \n \n 1 January 2024 \n \n \n Amendments to IFRS 16 Leases - Sale and leaseback transactions \n \n \n \n \n 1 January 2024 \n \n \n Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements \n \n \n \n \n   \n 3: Significant changes in the year \n Ongoing Advice Review \n In the preliminary results announcement on 6 March 2024, the Group committed to undertake a review of historical data and practices across the Appointed Representative firms in the Quilter Financial Planning network in relation to the provision of ongoing advice. Following discussion with the FCA, a Skilled Person was appointed in June 2024 to assess and provide a view to the FCA on whether the delivery of ongoing advice services by Appointed Representative firms in the Quilter Financial Planning network has been compliant with applicable regulatory requirements during the period from 1 January 2017 to 31 December 2023. Although the Skilled Person Review has not yet completed, it is relatively well progressed. Subject to further engagement with the FCA that will occur following the Skilled Person Review, it is currently expected that some form of customer remediation will likely be required. Based on the results of the Skilled Person Review to date together with other evidence available, the Group has recognised a provision for a reasonable estimate of the costs of such a customer remediation exercise, including both redress and administrative costs, based upon current assumptions as to a plausible customer remediation approach that may be followed. See notes 16 and 17 for further details of the provision and contingent liability. \n Acquisitions \n The Group made two acquisitions in the year, 100% of the share capital of NuWealth Limited and 35% of the share capital of Beals Mortgage and Financial Services Limited. Further details are given in note 4. \n 4: Business combinations, acquisitions and disposals \n The Group made two acquisitions during the year. There were no material acquisitions in the prior year. \n On 5 September 2024, Quilter acquired 100% of the share capital of NuWealth Limited for a total consideration of £6 million. NuWealth Limited provides a savings and investment app that offers its users savings tools, high-interest accounts and access to stocks, fractional shares and exchange traded funds. An intangible asset of £5 million was recognised on acquisition (see note 9) related to the software acquired. \n On 29 October 2024, the Group acquired 35.0% of the share capital of Beals Mortgage and Financial Services Limited, and 9.4% of the share capital of its subsidiary, Clinton Kennard Associates Ltd for the total of £13 million. The Group has carried out an assessment of control and influence and concluded that it has significant influence but not control of each of these entities. It will therefore account for each of these holdings as an investment in associate and account for its share of the profits or losses of these companies using the equity method of accounting. Subject to certain terms being met, the Group intends to acquire the remaining share capital of each company over the next five years. \n There have been no material disposals of businesses during 2023 and 2024. \n 5: Alternative performance measures \n 5(a): Adjusted profit before tax and reconciliation to (loss)/profit after tax                                                                                               \n Basis of preparation of adjusted profit before tax \n Adjusted profit before tax is one of the Group's alternative performance measures (\"APMs\") and represents the Group's IFRS results, adjusted for specific items that management considers to be outside of the Group's normal operations or one-off in nature, as detailed in note 5(b). Adjusted profit before tax does not provide a complete picture of the Group's financial performance, which is disclosed in the statement of comprehensive income, but is instead intended to provide additional comparability and understanding of the financial results. \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n £m \n \n \n \n \n \n \n \n Notes \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Affluent \n \n \n \n \n \n 148 \n \n \n 124 \n \n \n \n \n High Net Worth \n \n \n \n \n \n 48 \n \n \n 41 \n \n \n \n \n Head Office \n \n \n \n \n \n - \n \n \n 2 \n \n \n \n \n Adjusted profit before tax \n \n \n 6(b) \n \n \n 196 \n \n \n 167 \n \n \n \n \n Adjusting items: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Impact of acquisition and disposal-related accounting \n \n \n 5(b)(i) \n \n \n (40) \n \n \n (39) \n \n \n \n \n Business transformation costs \n \n \n 5(b)(ii) \n \n \n (26) \n \n \n (28) \n \n \n \n \n Skilled Person Review \n \n \n 5(b)(iii) \n \n \n (10) \n \n \n - \n \n \n \n \n Customer remediation exercise \n \n \n 5(b)(iv) \n \n \n (76) \n \n \n - \n \n \n \n \n Other customer remediation \n \n \n 5(b)(v) \n \n \n 3 \n \n \n (6) \n \n \n \n \n Exchange rate movements (ZAR/GBP) \n \n \n 5(b)(vi) \n \n \n 1 \n \n \n (2) \n \n \n \n \n Policyholder tax adjustments \n \n \n 5(b)(vii) \n \n \n (90) \n \n \n (62) \n \n \n \n \n Other adjusting items \n \n \n 5(b)(viii) \n \n \n - \n \n \n 1 \n \n \n \n \n Finance costs \n \n \n 5(b)(ix) \n \n \n (18) \n \n \n (19) \n \n \n \n \n Total adjusting items before tax \n \n \n \n \n \n (256) \n \n \n (155) \n \n \n \n \n (Loss)/profit before tax attributable to shareholder returns \n \n \n   \n \n \n (60) \n \n \n 12 \n \n \n \n \n Income tax attributable to policyholder returns \n \n \n 7 \n \n \n 95 \n \n \n 76 \n \n \n \n \n IFRS profit before tax \n \n \n \n \n \n 35 \n \n \n 88 \n \n \n \n \n Income tax expense \n \n \n 7 \n \n \n (69) \n \n \n (46) \n \n \n \n \n IFRS (loss)/profit after tax \n \n \n   \n \n \n (34) \n \n \n 42 \n \n \n \n \n 5(b): Adjusting items \n The adjustments made to the Group's IFRS profit before tax to calculate adjusted profit before tax are detailed below. \n 5(b)(i): Impact of acquisition and disposal-related accounting \n The Group excludes any impairment of goodwill from adjusted profit as well as the amortisation and impairment of acquired intangible assets, finance costs related to the discounting of contingent consideration and incidental items relating to past disposals. \n The effect of these adjustments to determine adjusted profit are summarised below. \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n £m \n \n \n \n \n   \n \n \n \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n \n \n \n 38 \n \n \n 38 \n \n \n \n \n Impairment of acquired intangible assets 1 \n \n \n \n \n \n - \n \n \n 1 \n \n \n \n \n Amortisation of acquired adviser schemes \n \n \n \n \n \n 2 \n \n \n - \n \n \n \n \n Total impact of acquisition and disposal-related accounting \n \n \n 40 \n \n \n 39 \n \n \n \n \n 1 The impairment of acquired intangible assets in 2023 resulted from the impairment of specific client books held within the Affluent operating segment as the Group could no longer support the carrying value. \n 5(b)(ii): Business transformation costs \n In 2024, business transformation costs totalled £26 million (2023: £28 million), the principal components of which are described below: \n Business Simplification costs - 2024: £24 million, 2023: £25 million \n During 2024 , the Group spent £24 million on delivering Simplification initiatives (2023: £25 million). The implementation costs to deliver the remaining £15 million of annualised run-rate savings for the programme are estimated to be £40 million. \n Investment in business costs - 2024: £2 million, 2023: £1 million \n Investment in business costs of £2 million (2023: £1 million) were incurred as the Group continues to enable and support advisers and clients and improve productivity through better utilisation of technology. \n Business separation costs following the sale of Quilter International - 2024: £nil, 2023: £2 million \n The Group sold Quilter International to Utmost Group in 2021 and entered into a Transitional Service Agreement with the acquirer. The cost to the Group of running the Transitional Service Agreement, which ended in November 2023, was £nil for 2024 (2023: £2 million). \n 5(b)(iii): Skilled Person Review \n Skilled Person Review costs of £10 million (2023: £nil) include the estimated external cost and direct cost of internal resources to support and perform the Skilled Person Review of historical data and practices across the Quilter Financial Planning network of Appointed Representative firms. This cost is excluded from adjusted profit as management considers it to be outside of the Group's normal operations and one-off in nature. \n 5(b)(iv): Customer remediation exercise \n Customer remediation exercise costs of £76 million (2023: £nil) include the estimated redress payable to customers, comprising a refund of ongoing advice charges and interest payable for customers impacted, and administrative costs, which represent the costs to perform a potential customer remediation exercise across the Quilter Financial Planning network of Appointed Representative firms (see note 16). This cost is excluded from adjusted profit as management considers it to be outside of the Group's normal operations and one-off in nature. \n 5(b)(v): Other customer remediation \n Lighthouse pension transfer advice provision - 2024: £3 million credit, 2023: £6 million cost \n For 2023, the customer remediation expense of £6 million reflected £4 million of legal, consulting and other costs and a £2 million provision increase related to non-British Steel Pension Scheme redress payments. This was the result of the Group-managed past business review of defined benefit to defined contribution (\"DB to DC\") pension transfer advice suitability by an independent expert. For 2024, the provision for redress decreased by £3 million as a result of the redress calculations performed for customers being lower than forecast in 2023 due to the changes in assumptions used to perform the calculations and market movements of the pension scheme values during 2024. Further details of the provision are provided in note 16. \n 5(b)(vi): Exchange rate movements (ZAR/GBP) \n In 2024, income of £1 million was recognised (2023: £2 million expense) due to foreign exchange movements on cash held in South African Rand in preparation for payments of dividends to shareholders. Cash was converted to South African Rand upon announcement of the dividend payments to provide an economic hedge for the Group. The foreign exchange movements are fully offset by an equal amount taken directly to retained earnings. \n 5(b)(vii): Policyholder tax adjustments \n In 2024, the total amount of policyholder tax adjustments to adjusted profit is a credit of £90 million (2023: £62 million credit). Adjustments to policyholder tax are made to remove distortions arising from market volatility that can, in turn, lead to volatility in the policyholder tax adjustments between periods. The recognition of the income received from policyholders to fund the policyholder tax liability (which is included within the Group's income) can vary in timing to the recognition of the corresponding tax expense, creating volatility in the Group's IFRS profit or loss before tax. During 2024, the Group made changes to the Group's unit pricing policy relating to policyholder tax charges which will reduce the value of these timing differences in future periods. These changes, together with current year market movements, have resulted in the unwind of most of the opening timing difference. \n 5(b)(viii): Other adjusting items \n In 2024, there were no other adjusting items. In 2023, £1 million of income was received in relation to the settlement offer for the indemnification asset that was impaired in 2022.  \n 5(b)(ix): Finance costs \n The nature of much of the Group's operations means that, for management's decision-making and internal performance management, the effects of interest costs on external borrowings are removed when calculating adjusted profit. For 2024, finance costs were £18 million (2023: £19 million). \n 5(c): Reconciliation of IFRS income and expenses to \"Total net revenue\" and \"Operating expenses\" within adjusted profit \n This reconciliation shows how each line of the Group's IFRS income and expenses are allocated to the Group's APMs: Net management fees, Other revenue, Investment revenue, Total net revenue and Operating expenses which form the Group's adjusted profit before tax. The total column in the table below, down to \"Profit before tax attributable to shareholder returns\", reconciles to each line of the consolidated statement of comprehensive income. Allocations are determined by management and aim to show the Group's sources of profit (net of relevant directly attributable expenses). These allocations remain consistent from year to year to ensure comparability, unless otherwise stated. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n Year ended 31 December 2024 \n \n \n Net mgmt. fees 1 \n \n \n Other revenue 1 \n \n \n Investment revenue 1 \n \n \n Total net revenue 1 \n \n \n Operating expenses 1 \n \n \n Adjusted profit before tax \n \n \n Consol. of funds 2 \n \n \n Total \n \n \n \n \n Income \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Fee income and other income from service activities \n \n \n 541 \n \n \n 87 \n \n \n - \n \n \n 628 \n \n \n - \n \n \n 628 \n \n \n (84) \n \n \n 544 \n \n \n \n \n Investment return 3 \n \n \n 57 \n \n \n 4,037 \n \n \n 78 \n \n \n 4,172 \n \n \n - \n \n \n 4,172 \n \n \n 705 \n \n \n 4,877 \n \n \n \n \n Other income \n \n \n - \n \n \n 3 \n \n \n - \n \n \n 3 \n \n \n 21 \n \n \n 24 \n \n \n 4 \n \n \n 28 \n \n \n \n \n Total income \n \n \n 598 \n \n \n 4,127 \n \n \n 78 \n \n \n 4,803 \n \n \n 21 \n \n \n 4,824 \n \n \n 625 \n \n \n 5,449 \n \n \n \n \n Expenses \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Change in investment contract liabilities 3 \n \n \n (26) \n \n \n (4,032) \n \n \n (7) \n \n \n (4,065) \n \n \n - \n \n \n (4,065) \n \n \n - \n \n \n (4,065) \n \n \n \n \n Fee and commission expenses and other acquisition costs \n \n \n (50) \n \n \n 3 \n \n \n - \n \n \n (47) \n \n \n (1) \n \n \n (48) \n \n \n (1) \n \n \n (49) \n \n \n \n \n Change in third-party interests in consolidated funds \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (587) \n \n \n (587) \n \n \n \n \n Other operating and administrative expenses \n \n \n (15) \n \n \n - \n \n \n - \n \n \n (15) \n \n \n (639) \n \n \n (654) \n \n \n (37) \n \n \n (691) \n \n \n \n \n Finance costs \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (21) \n \n \n (21) \n \n \n - \n \n \n (21) \n \n \n \n \n Total expenses \n \n \n (91) \n \n \n (4,029) \n \n \n (7) \n \n \n (4,127) \n \n \n (661) \n \n \n (4,788) \n \n \n (625) \n \n \n (5,413) \n \n \n \n \n Impairment of investments in associates \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1) \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n \n \n Profit before tax \n \n \n 507 \n \n \n 98 \n \n \n 71 \n \n \n 676 \n \n \n (641) \n \n \n 35 \n \n \n - \n \n \n 35 \n \n \n \n \n Income tax expense attributable to policyholder returns \n \n \n (95) \n \n \n - \n \n \n - \n \n \n (95) \n \n \n - \n \n \n (95) \n \n \n - \n \n \n (95) \n \n \n \n \n Loss before tax attributable to shareholder returns \n \n \n 412 \n \n \n 98 \n \n \n 71 \n \n \n 581 \n \n \n (641) \n \n \n (60) \n \n \n - \n \n \n (60) \n \n \n \n \n Adjusting items: \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Impact of acquisition and disposal-related accounting \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 40 \n \n \n 40 \n \n \n   \n \n \n   \n \n \n \n \n Business transformation costs \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 26 \n \n \n 26 \n \n \n   \n \n \n   \n \n \n \n \n Skilled Person Review \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 10 \n \n \n 10 \n \n \n   \n \n \n   \n \n \n \n \n Customer remediation exercise \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 76 \n \n \n 76 \n \n \n   \n \n \n   \n \n \n \n \n Other customer remediation \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (3) \n \n \n (3) \n \n \n   \n \n \n   \n \n \n \n \n Exchange rate movements (ZAR/GBP) \n \n \n - \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n   \n \n \n   \n \n \n \n \n Policyholder tax adjustments \n \n \n 90 \n \n \n - \n \n \n - \n \n \n 90 \n \n \n - \n \n \n 90 \n \n \n   \n \n \n   \n \n \n \n \n Finance costs \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 18 \n \n \n 18 \n \n \n   \n \n \n   \n \n \n \n \n Adjusting items \n \n \n 90 \n \n \n (1) \n \n \n - \n \n \n 89 \n \n \n 167 \n \n \n 256 \n \n \n   \n \n \n   \n \n \n \n \n Adjusted profit before tax \n \n \n 502 \n \n \n 97 \n \n \n 71 \n \n \n 670 \n \n \n (474) \n \n \n 196 \n \n \n   \n \n \n   \n \n \n \n \n  1 The APMs \"Net management fees\", \"Other revenue\", \"Investment revenue\", \"Total net revenue\" and \"Operating expenses\" are commented on within the Financial review. \n 2 Consolidation of funds shows the grossing up impact to the Group's income and expenses as a result of the consolidation of funds requirements. This grossing up is excluded from the Group's adjusted profit. \n 3 Reported within net management fees, investment return of £57 million represents £36 million interest income on investments held for the benefit of policyholders and £21 million net interest income on client money balances. Change in investment contract liabilities of £26 million represents the amount of interest income paid to policyholders. The net balance of £31 million represents interest income on customer balances retained by the Group for 2024. The £78 million investment return less £7 million change in investment contract liabilities paid to customers on transactional cash balances, as reported within investment revenue, represents £71 million of interest income on shareholder cash and cash equivalents. \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n Year ended 31 December 2023 \n \n \n Net mgmt. fees 1 \n \n \n Other revenue 1 \n \n \n Investment revenue 1 \n \n \n Total net revenue 1 \n \n \n Operating expenses 1 \n \n \n Adjusted profit before tax \n \n \n Consol. of funds 2 \n \n \n Total \n \n \n \n \n Income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Fee income and other income from service activities \n \n \n 527 \n \n \n 86 \n \n \n - \n \n \n 613 \n \n \n - \n \n \n 613 \n \n \n (71) \n \n \n 542 \n \n \n \n \n Investment return 3 \n \n \n 48 \n \n \n 3,285 \n \n \n 68 \n \n \n 3,401 \n \n \n - \n \n \n 3,401 \n \n \n 674 \n \n \n 4,075 \n \n \n \n \n Other income \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 9 \n \n \n 9 \n \n \n - \n \n \n 9 \n \n \n \n \n Total income \n \n \n 575 \n \n \n 3,371 \n \n \n 68 \n \n \n 4,014 \n \n \n 9 \n \n \n 4,023 \n \n \n 603 \n \n \n 4,626 \n \n \n \n \n Expenses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Change in investment contract liabilities 3 \n \n \n (25) \n \n \n (3,282) \n \n \n (6) \n \n \n (3,313) \n \n \n - \n \n \n (3,313) \n \n \n - \n \n \n (3,313) \n \n \n \n \n Fee and commission expenses, and other acquisition costs \n \n \n (46) \n \n \n - \n \n \n - \n \n \n (46) \n \n \n - \n \n \n (46) \n \n \n (3) \n \n \n (49) \n \n \n \n \n Change in third-party interests in consolidated funds \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (579) \n \n \n (579) \n \n \n \n \n Other operating and administrative expenses \n \n \n (13) \n \n \n (5) \n \n \n - \n \n \n (18) \n \n \n (536) \n \n \n (554) \n \n \n (21) \n \n \n (575) \n \n \n \n \n Finance costs \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (22) \n \n \n (22) \n \n \n - \n \n \n (22) \n \n \n \n \n Total expenses \n \n \n (84) \n \n \n (3,287) \n \n \n (6) \n \n \n (3,377) \n \n \n (558) \n \n \n (3,935) \n \n \n (603) \n \n \n (4,538) \n \n \n \n \n Profit before tax \n \n \n 491 \n \n \n 84 \n \n \n 62 \n \n \n 637 \n \n \n (549) \n \n \n 88 \n \n \n - \n \n \n 88 \n \n \n \n \n Tax credit attributable to policyholder returns \n \n \n (76) \n \n \n - \n \n \n - \n \n \n (76) \n \n \n - \n \n \n (76) \n \n \n - \n \n \n (76) \n \n \n \n \n Profit before tax attributable to shareholder returns \n \n \n 415 \n \n \n 84 \n \n \n 62 \n \n \n 561 \n \n \n (549) \n \n \n 12 \n \n \n - \n \n \n 12 \n \n \n \n \n Adjusting items: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Impact of acquisition and disposal-related accounting \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 39 \n \n \n 39 \n \n \n \n \n \n \n \n \n \n \n Business transformation costs \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 28 \n \n \n 28 \n \n \n \n \n \n \n \n \n \n \n Other customer remediation \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 6 \n \n \n 6 \n \n \n \n \n \n \n \n \n \n \n Exchange rate movements (ZAR/GBP) \n \n \n - \n \n \n 2 \n \n \n - \n \n \n 2 \n \n \n - \n \n \n 2 \n \n \n \n \n \n \n \n \n \n \n Policyholder tax adjustments \n \n \n 62 \n \n \n - \n \n \n - \n \n \n 62 \n \n \n - \n \n \n 62 \n \n \n \n \n \n \n \n \n \n \n Other adjusting items \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1) \n \n \n (1) \n \n \n \n \n \n \n \n \n \n \n Finance costs \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 19 \n \n \n 19 \n \n \n \n \n \n \n \n \n \n \n Adjusting items \n \n \n 62 \n \n \n 2 \n \n \n - \n \n \n 64 \n \n \n 91 \n \n \n 155 \n \n \n \n \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n 477 \n \n \n 86 \n \n \n 62 \n \n \n 625 \n \n \n (458) \n \n \n 167 \n \n \n \n \n \n \n \n \n \n \n 1 The APMs \"Net management fees\", \"Other revenue\", \"Investment revenue\", \"Total net revenue\" and \"Operating expenses\" are commented on within the Financial review. \n 2 Consolidation of funds shows the grossing up impact to the Group's profit or loss as a result of the consolidation of funds requirements. This grossing up is excluded from the Group's adjusted profit. \n 3 Reported within net management fees, investment return of £48 million represents £30 million interest income on investments held for the benefit of policyholders and £18 million net interest income on client money balances. Change in investment contract liabilities of £25 million represents the amount of interest income paid to policyholders. The net balance of £23 million represents interest income on customer balances retained by the Group for 2023. The £68 million investment return less £6 million change in investment contract liabilities paid to customers on transactional cash balances, as reported within investment revenue, represents £62 million of net interest income on shareholder cash and cash equivalents. \n 6: Segment information \n 6(a): Segment presentation \n The Group has two operating segments: High Net Worth and Affluent. The segments used for reporting purposes are consistent with the structure and management of the Group. Head Office includes certain revenues and central costs that are not allocated to the segments. \n Adjusted profit before tax is an APM reported to the Group's management and the Board of Quilter plc. The segment information in this note reflects the adjusted and IFRS profit measures for each operating segment as provided to management and the Board. Management and the Board use additional performance indicators to assess the performance of each of the segments, including net client cash flows, assets under management and administration, total net revenue and operating margin. Income is analysed in further detail for each operating segment in note 6(b). \n Consistent with internal reporting, income and expenses that are not directly attributable to a particular segment are allocated between segments where appropriate. The Group accounts for inter-segment income and transfers as if the transactions were with third parties at current market prices. \n High Net Worth \n This segment comprises Quilter Cheviot and Quilter Cheviot Financial Planning. \n Quilter Cheviot provides discretionary investment management, predominantly in the United Kingdom, with bespoke investment portfolios tailored to the individual needs of high‑net‑worth clients, charities, companies and institutions through a network of branches in London and the regions. Investment management services are also provided by operations in the Channel Islands and Ireland. \n Quilter Cheviot Financial Planning provides financial advice for protection, mortgages, savings, investments and pensions predominantly to high‑net‑worth clients. \n Affluent \n This segment comprises Quilter Investment Platform, Quilter Investors, Quilter Financial Planning and NuWealth. \n Quilter Investment Platform is a leading investment platform provider of advice-based wealth management products and services in the UK, which serves an affluent client base through advised multi-channel distribution. \n Quilter Investors is a leading provider of investment solutions in the UK multi-asset market. It develops and manages investment solutions in the form of funds for the Group and third-party clients. It has several fund ranges which vary in breadth of underlying asset class. The investment management of the Quilter investors fund range has been delegated to Quilter Investment Platform from 1 January 2025. \n Quilter Financial Planning is a restricted and independent financial adviser network providing mortgage and financial planning advice and financial solutions for both individuals and businesses through a network of intermediaries. It operates across all markets, from wealth management and retirement planning advice through to dealing with property wealth and personal and business protection needs. \n NuWealth is a developer of a fintech platform through which customers can build investment portfolios. The NuWealth platform provides access to savings and investments and is particularly beneficial for people starting to invest who are looking for additional help and guidance, with the option to work with a financial adviser later in their investment journey. \n Head Office \n In addition to the Group's two operating segments, Head Office comprises the investment return on centrally held assets, central support function expenses, central core structural borrowings and certain tax balances. \n 6(b): Adjusted profit statement - segment information \n The table below presents the Group's operations split by operating segment, reconciling IFRS profit or loss to adjusted profit before tax. The Total column reconciles to the consolidated statement of comprehensive income. \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n £m \n \n \n \n \n   \n \n \n   \n \n \n Operating segments \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Year ended 31 December 2024 \n \n \n Notes \n \n \n Affluent \n \n \n High \n Net \n  Worth \n \n \n Head Office \n \n \n Consolidation adjustments 1 \n \n \n Total \n \n \n \n \n Income \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Premium-based fees \n \n \n \n \n \n 70 \n \n \n 19 \n \n \n - \n \n \n - \n \n \n 89 \n \n \n \n \n Fund-based fees \n \n \n \n \n \n 343 \n \n \n 184 \n \n \n - \n \n \n (83) \n \n \n 444 \n \n \n \n \n Fixed fees \n \n \n \n \n \n 1 \n \n \n - \n \n \n - \n \n \n - \n \n \n 1 \n \n \n \n \n Other fee and commission income \n \n \n \n \n \n 10 \n \n \n - \n \n \n - \n \n \n - \n \n \n 10 \n \n \n \n \n Fee income and other income from service activities \n \n \n \n \n \n 424 \n \n \n 203 \n \n \n - \n \n \n (83) \n \n \n 544 \n \n \n \n \n Investment return 2 \n \n \n \n \n \n 4,131 \n \n \n 21 \n \n \n 31 \n \n \n 694 \n \n \n 4,877 \n \n \n \n \n Other income \n \n \n \n \n \n 98 \n \n \n 2 \n \n \n 1 \n \n \n (73) \n \n \n 28 \n \n \n \n \n Segment income \n \n \n   \n \n \n 4,653 \n \n \n 226 \n \n \n 32 \n \n \n 538 \n \n \n 5,449 \n \n \n \n \n Expenses \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Change in investment contract liabilities 2 \n \n \n \n \n \n (4,065) \n \n \n - \n \n \n - \n \n \n - \n \n \n (4,065) \n \n \n \n \n Fee and commission expenses and other acquisition costs \n \n \n \n \n \n (49) \n \n \n - \n \n \n - \n \n \n - \n \n \n (49) \n \n \n \n \n Change in third-party interests in consolidated funds \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n (587) \n \n \n (587) \n \n \n \n \n Other operating and administrative expenses \n \n \n \n \n \n (484) \n \n \n (217) \n \n \n (29) \n \n \n 39 \n \n \n (691) \n \n \n \n \n Finance costs \n \n \n \n \n \n (2) \n \n \n - \n \n \n (29) \n \n \n 10 \n \n \n (21) \n \n \n \n \n Segment expenses \n \n \n   \n \n \n (4,600) \n \n \n (217) \n \n \n (58) \n \n \n (538) \n \n \n (5,413) \n \n \n \n \n Impairment of investments in associates \n \n \n \n \n \n - \n \n \n - \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n \n \n Profit/(loss) before tax \n \n \n   \n \n \n 53 \n \n \n 9 \n \n \n (27) \n \n \n - \n \n \n 35 \n \n \n \n \n Income tax expense attributable to policyholder returns \n \n \n \n \n \n (95) \n \n \n - \n \n \n - \n \n \n - \n \n \n (95) \n \n \n \n \n (Loss)/profit before tax attributable to shareholder returns \n \n \n \n \n \n (42) \n \n \n 9 \n \n \n (27) \n \n \n - \n \n \n (60) \n \n \n \n \n Adjusting items: \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Impact of acquisition and disposal-related accounting \n \n \n 5(b)(i) \n \n \n 9 \n \n \n 31 \n \n \n - \n \n \n - \n \n \n 40 \n \n \n \n \n Business transformation costs \n \n \n 5(b)(ii) \n \n \n 8 \n \n \n 8 \n \n \n 10 \n \n \n - \n \n \n 26 \n \n \n \n \n Skilled Person Review \n \n \n 5(b)(iii) \n \n \n 10 \n \n \n - \n \n \n - \n \n \n - \n \n \n 10 \n \n \n \n \n Customer remediation exercise \n \n \n 5(b)(iv) \n \n \n 76 \n \n \n - \n \n \n - \n \n \n - \n \n \n 76 \n \n \n \n \n Other customer remediation \n \n \n 5(b)(v) \n \n \n (3) \n \n \n - \n \n \n - \n \n \n - \n \n \n (3) \n \n \n \n \n Exchange rate movements (ZAR/GBP) \n \n \n 5(b)(vi) \n \n \n - \n \n \n - \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n \n \n Policyholder tax adjustments \n \n \n 5(b)(vii) \n \n \n 90 \n \n \n - \n \n \n - \n \n \n - \n \n \n 90 \n \n \n \n \n Finance costs \n \n \n 5(b)(ix) \n \n \n - \n \n \n - \n \n \n 18 \n \n \n - \n \n \n 18 \n \n \n \n \n Adjusting items before tax \n \n \n \n \n \n 190 \n \n \n 39 \n \n \n 27 \n \n \n - \n \n \n 256 \n \n \n \n \n Adjusted profit before tax \n \n \n   \n \n \n 148 \n \n \n 48 \n \n \n - \n \n \n - \n \n \n 196 \n \n \n \n \n 1 Consolidation adjustments comprise the elimination of inter-segment transactions and the consolidation of investment funds. \n 2 Investment return and change in investment contract liabilities includes net £31 million of interest income on customer cash and cash equivalents retained by the Group. I nvestment return total also includes £71 million of interest income on shareholder cash and cash equivalents. \n   \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n   \n \n \n Operating segments \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year ended 31 December 2023 \n \n \n Notes \n \n \n Affluent \n \n \n High \n          Net Worth \n \n \n Head Office \n \n \n Consolidation adjustments 1 \n \n \n Total \n \n \n \n \n Income \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Premium-based fees \n \n \n \n \n \n 66 \n \n \n 20 \n \n \n - \n \n \n - \n \n \n 86 \n \n \n \n \n Fund-based fees \n \n \n \n \n \n 336 \n \n \n 172 \n \n \n - \n \n \n (71) \n \n \n 437 \n \n \n \n \n Fixed fees \n \n \n \n \n \n 1 \n \n \n - \n \n \n - \n \n \n - \n \n \n 1 \n \n \n \n \n Other fee and commission income \n \n \n \n \n \n 18 \n \n \n - \n \n \n - \n \n \n - \n \n \n 18 \n \n \n \n \n Fee income and other income from service activities \n \n \n \n \n \n 421 \n \n \n 192 \n \n \n - \n \n \n (71) \n \n \n 542 \n \n \n \n \n Investment return 2 \n \n \n \n \n \n 3,361 \n \n \n 19 \n \n \n 28 \n \n \n 667 \n \n \n 4,075 \n \n \n \n \n Other income \n \n \n \n \n \n 88 \n \n \n 1 \n \n \n - \n \n \n (80) \n \n \n 9 \n \n \n \n \n Segment income \n \n \n   \n \n \n 3,870 \n \n \n 212 \n \n \n 28 \n \n \n 516 \n \n \n 4,626 \n \n \n \n \n Expenses \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Change in investment contract liabilities 2 \n \n \n \n \n \n (3,313) \n \n \n - \n \n \n - \n \n \n - \n \n \n (3,313) \n \n \n \n \n Fee and commission expenses, and other acquisition costs \n \n \n \n \n \n (47) \n \n \n - \n \n \n - \n \n \n (2) \n \n \n (49) \n \n \n \n \n Change in third-party interests in consolidated funds \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n (579) \n \n \n (579) \n \n \n \n \n Other operating and administrative expenses \n \n \n \n \n \n (387) \n \n \n (205) \n \n \n (41) \n \n \n 58 \n \n \n (575) \n \n \n \n \n Finance costs \n \n \n \n \n \n (3) \n \n \n - \n \n \n (26) \n \n \n 7 \n \n \n (22) \n \n \n \n \n Segment expenses \n \n \n   \n \n \n (3,750) \n \n \n (205) \n \n \n (67) \n \n \n (516) \n \n \n (4,538) \n \n \n \n \n Profit/(loss) before tax \n \n \n \n \n \n 120 \n \n \n 7 \n \n \n (39) \n \n \n - \n \n \n 88 \n \n \n \n \n Tax credit attributable to policyholder returns \n \n \n \n \n \n (76) \n \n \n - \n \n \n - \n \n \n - \n \n \n (76) \n \n \n \n \n Profit/(loss) before tax attributable to shareholder returns \n \n \n \n \n \n 44 \n \n \n 7 \n \n \n (39) \n \n \n - \n \n \n 12 \n \n \n \n \n Adjusting items: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Impact of acquisition and disposal-related accounting \n \n \n 5(b)(i) \n \n \n 7 \n \n \n 32 \n \n \n - \n \n \n - \n \n \n 39 \n \n \n \n \n Business transformation costs \n \n \n 5(b)(ii) \n \n \n 5 \n \n \n 3 \n \n \n 20 \n \n \n - \n \n \n 28 \n \n \n \n \n Other customer remediation \n \n \n 5(b)(v) \n \n \n 6 \n \n \n - \n \n \n - \n \n \n - \n \n \n 6 \n \n \n \n \n Exchange rate movements (ZAR/GBP) \n \n \n 5(b)(vi) \n \n \n - \n \n \n - \n \n \n 2 \n \n \n - \n \n \n 2 \n \n \n \n \n Policyholder tax adjustments \n \n \n 5(b)(vii) \n \n \n 62 \n \n \n - \n \n \n - \n \n \n - \n \n \n 62 \n \n \n \n \n Other adjusting items \n \n \n 5(b)(viii) \n \n \n - \n \n \n (1) \n \n \n - \n \n \n - \n \n \n (1) \n \n \n \n \n Finance costs \n \n \n 5(b)(ix) \n \n \n - \n \n \n - \n \n \n 19 \n \n \n - \n \n \n 19 \n \n \n \n \n Adjusting items before tax \n \n \n \n \n \n 80 \n \n \n 34 \n \n \n 41 \n \n \n - \n \n \n 155 \n \n \n \n \n Adjusted profit before tax \n \n \n   \n \n \n 124 \n \n \n 41 \n \n \n 2 \n \n \n - \n \n \n 167 \n \n \n \n \n 1 Consolidation adjustments comprise the elimination of inter-segment transactions and the consolidation of investment funds. \n 2 Investment return and change in investment contract liabilities includes net £23 million of interest income on customer cash and cash equivalents retained by the Group. Investment return total also includes £62 million of interest income on shareholder cash and cash equivalents. \n 7: Tax \n 7(a): Tax charged \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Current tax \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n United Kingdom \n \n \n \n \n \n 67 \n \n \n 2 \n \n \n \n \n Overseas tax \n \n \n \n \n \n 1 \n \n \n - \n \n \n \n \n Adjustments to current tax in respect of prior periods \n \n \n \n \n \n (10) \n \n \n - \n \n \n \n \n Total current tax charge \n \n \n   \n \n \n 58 \n \n \n 2 \n \n \n \n \n Deferred tax \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Origination and reversal of temporary differences \n \n \n \n \n \n                       3 \n \n \n 52 \n \n \n \n \n Effect on deferred tax of changes in tax rates \n \n \n \n \n \n - \n \n \n (3) \n \n \n \n \n Adjustments to deferred tax in respect of prior periods \n \n \n \n \n \n 8 \n \n \n (5) \n \n \n \n \n Total deferred tax charge \n \n \n   \n \n \n 11 \n \n \n 44 \n \n \n \n \n Total tax charged \n \n \n   \n \n \n 69 \n \n \n 46 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Attributable to policyholder returns \n \n \n \n \n \n 95 \n \n \n 76 \n \n \n \n \n Attributable to shareholder returns \n \n \n \n \n \n (26) \n \n \n (30) \n \n \n \n \n Total tax charged \n \n \n \n \n \n 69 \n \n \n 46 \n \n \n \n \n   \n Policyholder tax \n Certain products are subject to tax on policyholders' investment returns. This \"policyholder tax\" is an element of total tax expense. To make the tax expense more meaningful, tax attributable to policyholder returns and tax attributable to shareholder returns are shown separately in the consolidated statement of comprehensive income. \n The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years. The remainder of the tax expense is attributed to shareholder returns. \n The Group's income tax charge was £69 million in 2024 (2023: £46 million tax charge). The income tax charge can vary significantly year-on-year as a result of market volatility and the impact this has on policyholder tax. \n The recognition of the income received from policyholders to fund the policyholder tax liability (which is included within the Group's income) has historically been volatile due to timing differences between the recognition of policy deductions and credits and the corresponding policyholder tax expense, resulting in the need for significant adjustments to the adjusted profit to remove these distortions. The Group has made changes to the Group's unit pricing policy during 2024 relating to policyholder tax charges which will reduce future volatility in these timing differences. These changes are expected to reduce the value of adjustments made to future periods adjusted profit, set out in note 5(b)(vii). \n Market movements for the year ended 31 December 2024 resulted in investment gains of £342 million on products subject to policyholder tax. The gain is a component of the total \"investment return\" gain of £4,877 million shown in the consolidated statement of comprehensive income. The tax impact of the £342 million investment return gain is a significant element of the £95 million tax charge attributable to policyholder returns in 2024 (2023: £76 million charge). \n First time recognition of deferred tax assets on tax losses \n Within the £11 million total deferred tax charge, the Group has recognised £10 million shareholder deferred tax credit in respect of previously unrecognised losses. \n Pillar II taxes \n Pillar II legislation has been substantively enacted in the UK, introducing a Pillar II minimum effective tax rate of 15%. The legislation implements a Multinational Top-up Tax (\"MTT\") and a Domestic Top-up Tax (\"DTT\"), effective for the Group's financial year beginning 1 January 2024. The Group has applied the exemption under IAS 12.4A and accordingly will not recognise or disclose information about deferred tax assets and liabilities related to Pillar II income taxes. \n The assessment of the exposure to Pillar II income taxes has shown that the majority of the Group's profits arise in countries with tax rates above 15%. The position in respect of these rules in each of the Group's main territories is summarised below. \n UK \n The Group has assessed that its Pillar II UK effective tax rate exceeds the 15% minimum rate and therefore there is no additional liability in relation to the UK. \n The scope of the MTT means that a top-up tax charge may also arise in the UK on profits earned in countries with lower tax rates in which the Group operates, subject to a local qualifying domestic minimum tax. The Group's main non-UK operations are in Jersey and Ireland. Ireland has enacted a qualifying domestic minimum tax (see below), and accordingly no additional tax charge is due in the UK on Irish operations. Jersey is expected to introduce a qualifying domestic minimum tax in 2025. The Group's effective tax rate in Jersey is 10% and therefore a MTT liability of £0.1 million in relation to Jersey profits arises in the UK during 2024. This does not have a material impact on the Group's tax charge. \n Jersey, Guernsey and the Isle of Man \n The three Crown Dependencies have enacted or are due to enact legislation to introduce a domestic minimum tax with effect from 1 January 2025. The Group does not therefore expect to pay an additional local tax in these countries during 2024. The Group expects to pay a MTT in the UK in respect of any 2024 taxable profits arising in these countries (see above). \n Ireland \n Ireland has introduced a qualifying domestic minimum tax. This has been substantively enacted, effective for the Group's financial year beginning 1 January 2024. The Group's effective tax rate in Ireland is 19% and therefore no additional tax arises in Ireland in 2024. \n Other \n The Group has assessed there are no material Pillar II tax charge in any other countries in which it had a presence during 2024. \n 7(b): Reconciliation of total income tax expense \n The income tax credited or charged to profit or loss differs from the amount that would apply if all of the Group's profits from all the countries in which the Group operates had been taxed at the UK standard Corporation Tax rate. The difference in the effective rate is explained below: \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Profit before tax \n \n \n   \n \n \n 35 \n \n \n 88 \n \n \n \n \n Tax at UK standard rate of 25% (2023: 23.5%) \n \n \n \n \n \n 9 \n \n \n 21 \n \n \n \n \n Untaxed and low taxed income \n \n \n \n \n \n (1) \n \n \n (1) \n \n \n \n \n Expenses not deductible for tax purposes \n \n \n \n \n \n 1 \n \n \n 2 \n \n \n \n \n Adjustments to current tax in respect of prior years \n \n \n \n \n \n (10) \n \n \n - \n \n \n \n \n Net movements on unrecognised deferred tax assets \n \n \n \n \n \n (10) \n \n \n (29) \n \n \n \n \n Effect of changes in tax rates on deferred tax \n \n \n \n \n \n - \n \n \n (3) \n \n \n \n \n Adjustments to deferred tax in respect of prior periods \n \n \n \n \n \n 8 \n \n \n (5) \n \n \n \n \n Income tax attributable to policyholder returns (net of tax relief) \n \n \n \n \n \n 72 \n \n \n 61 \n \n \n \n \n Total tax charged to profit or loss \n \n \n   \n \n \n 69 \n \n \n 46 \n \n \n \n \n   \n 7(c): Reconciliation of IFRS income tax credit or expense to income tax on adjusted profit \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n Note \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Income tax expense 1 \n \n \n   \n \n \n 69 \n \n \n 46 \n \n \n \n \n Tax on adjusting items \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Impact of acquisition and disposal-related accounting \n \n \n \n \n \n 10 \n \n \n 9 \n \n \n \n \n Business transformation costs \n \n \n \n \n \n 7 \n \n \n 7 \n \n \n \n \n Skilled Person Review \n \n \n \n \n \n 2 \n \n \n - \n \n \n \n \n Customer remediation exercise \n \n \n \n \n \n 19 \n \n \n - \n \n \n \n \n Other customer remediation \n \n \n \n \n \n (1) \n \n \n 1 \n \n \n \n \n Finance costs \n \n \n \n \n \n 4 \n \n \n 4 \n \n \n \n \n Exchange rate movements (ZAR/GBP) \n \n \n \n \n \n - \n \n \n 1 \n \n \n \n \n Tax adjusting items \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Policyholder tax adjustments \n \n \n 5(b)(vii) \n \n \n (90) \n \n \n (62) \n \n \n \n \n Other shareholder tax adjustments 2 \n \n \n \n \n \n 33 \n \n \n 46 \n \n \n \n \n Tax on adjusting items \n \n \n   \n \n \n (16) \n \n \n 6 \n \n \n \n \n Less: tax attributable to policyholder returns within adjusted profit 3 \n \n \n \n \n \n (5) \n \n \n (14) \n \n \n \n \n Tax charged on total adjusted profit \n \n \n   \n \n \n 48 \n \n \n 38 \n \n \n \n \n 1 Includes both tax attributable to policyholder and shareholder returns, in compliance with IFRS. \n 2 Other shareholder tax adjustments comprise the reallocation of adjustments from policyholder tax as explained in note 5(b)(vii) and shareholder tax adjustments for one‑off items in line with the Group's adjusted profit policy. \n 3 Adjusted profit treats policyholder tax as a pre-tax expense (this includes policyholder tax under IFRS and the policyholder tax adjustments) and is therefore removed from the tax charge on adjusted profit. \n 8: Earnings per share \n The Group calculates earnings per share (\"EPS\") on a number of different bases. IFRS requires the calculation of basic and diluted EPS. Adjusted EPS reflects earnings that are consistent with the Group's adjusted profit measure and Headline earnings per share (\"HEPS\") is a requirement of the Johannesburg Stock Exchange. \n 8(a): Weighted average number of Ordinary Shares \n The table below summarises the calculation of the weighted average number of Ordinary Shares for the purposes of calculating basic and diluted earnings per share for each profit measure (IFRS, adjusted profit and Headline earnings). \n \n \n \n \n \n \n \n \n \n \n \n \n \n Million \n \n \n \n \n   \n \n \n \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Weighted average number of Ordinary Shares \n \n \n   \n \n \n 1,404 \n \n \n 1,404 \n \n \n \n \n Own shares including those held in consolidated funds and employee benefit trusts \n \n \n   \n \n \n (60) \n \n \n (54) \n \n \n \n \n Basic weighted average number of Ordinary Shares \n \n \n \n \n \n 1,344 \n \n \n 1,350 \n \n \n \n \n Adjustment for dilutive share awards and options \n \n \n   \n \n \n 48 \n \n \n 24 \n \n \n \n \n Diluted weighted average number of Ordinary Shares \n \n \n   \n \n \n 1,392 \n \n \n 1,374 \n \n \n \n \n 8(b): Basic and diluted EPS (IFRS and adjusted profit) \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n Notes \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n (Loss)/profit after tax \n \n \n   \n \n \n (34) \n \n \n 42 \n \n \n \n \n Total adjusting items before tax \n \n \n 5(a) \n \n \n 256 \n \n \n 155 \n \n \n \n \n Tax on adjusting items \n \n \n 7(c) \n \n \n 16 \n \n \n (6) \n \n \n \n \n Less: policyholder tax adjustments \n \n \n 7(c) \n \n \n (90) \n \n \n (62) \n \n \n \n \n Adjusted profit after tax \n \n \n   \n \n \n 148 \n \n \n 129 \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n Pence \n \n \n \n \n   \n \n \n Post-tax profit \n measure used \n \n \n Year ended \n 31 December \n 2024 \n \n \n Year ended \n 31 December \n 2023 \n \n \n \n \n Basic EPS \n \n \n IFRS profit \n \n \n (2.5) \n \n \n 3.1 \n \n \n \n \n Diluted EPS 1 \n \n \n IFRS profit \n \n \n (2.5) \n \n \n 3.1 \n \n \n \n \n Adjusted basic EPS \n \n \n Adjusted profit \n \n \n 11.0 \n \n \n 9.6 \n \n \n \n \n Adjusted diluted EPS \n \n \n Adjusted profit \n \n \n 10.6 \n \n \n 9.4 \n \n \n \n \n 1 The adjustment for share awards and options would be antidilutive and as such has not been included in the calculation of diluted EPS in accordance with the requirements of IFRS. \n 8(c): Headline earnings per share \n \n \n \n \n   \n \n \n + \n \n \n + \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n Year ended 31 December 2024 \n \n \n Year ended 31 December 2023 \n \n \n \n \n   \n \n \n Gross \n \n \n Net of tax \n \n \n Gross \n \n \n Net of tax \n \n \n \n \n (Loss)/profit \n \n \n   \n \n \n (34) \n \n \n \n \n \n 42 \n \n \n \n \n Adjusted for: \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   - add back of impairment of investments in associates \n \n \n 1 \n \n \n 1 \n \n \n - \n \n \n - \n \n \n \n \n   - add back of impairment loss on intangible assets \n \n \n - \n \n \n - \n \n \n 1 \n \n \n 1 \n \n \n \n \n Headline earnings \n \n \n   \n \n \n (33) \n \n \n \n \n \n 43 \n \n \n \n \n Headline basic EPS (pence) \n \n \n   \n \n \n (2.5) \n \n \n \n \n \n 3.2 \n \n \n \n \n Headline diluted EPS (pence) 1 \n \n \n   \n \n \n (2.5) \n \n \n \n \n \n 3.1 \n \n \n \n \n 1 The adjustment for share awards and options would be antidilutive and as such has not been included in the calculation of diluted HEPS in accordance with the requirements of The South African Institute of Chartered Accountants Circular 1/2023. \n 9: Goodwill and intangible assets \n 9(a): Analysis of goodwill and intangible assets \n The table below shows the movements in cost and amortisation of goodwill and intangible assets. \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £m \n \n \n \n \n \n \n \n Goodwill \n \n \n Other intangible assets \n \n \n Software \n \n \n Total \n \n \n \n \n Gross amount \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 1 January 2023 \n \n \n 306 \n \n \n 425 \n \n \n 30 \n \n \n 761 \n \n \n \n \n Disposals \n \n \n - \n \n \n - \n \n \n (21) \n \n \n (21) \n \n \n \n \n 31 December 2023 \n \n \n 306 \n \n \n 425 \n \n \n 9 \n \n \n 740 \n \n \n \n \n Acquisitions through business combinations 1 \n \n \n 1 \n \n \n - \n \n \n 7 \n \n \n 8 \n \n \n \n \n 31 December 2024 \n \n \n 307 \n \n \n 425 \n \n \n 16 \n \n \n 748 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Accumulated amortisation and impairment losses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1 January 2023 \n \n \n - \n \n \n (324) \n \n \n (24) \n \n \n (348) \n \n \n \n \n Amortisation charge for the year \n \n \n - \n \n \n (38) \n \n \n (2) \n \n \n (40) \n \n \n \n \n Disposals \n \n \n - \n \n \n - \n \n \n 21 \n \n \n 21 \n \n \n \n \n Impairment of other intangibles \n \n \n - \n \n \n (1) \n \n \n - \n \n \n (1) \n \n \n \n \n 31 December 2023 \n \n \n - \n \n \n (363) \n \n \n (5) \n \n \n (368) \n \n \n \n \n Acquisitions through business combinations 1 \n \n \n - \n \n \n - \n \n \n (1) \n \n \n (1) \n \n \n \n \n Amortisation charge for the year \n \n \n - \n \n \n (38) \n \n \n (2) \n \n \n (40) \n \n \n \n \n 31 December 2024 \n \n \n - \n \n \n (401) \n \n \n (8) \n \n \n (409) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Carrying amount \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December 2023 \n \n \n 306 \n \n \n 62 \n \n \n 4 \n \n \n 372 \n \n \n \n \n 31 December 2024 \n \n \n 307 \n \n \n 24 \n \n \n 8 \n \n \n 339 \n \n \n \n \n 1 Relates to the acquisition of NuWealth Limited as explained in note 4. Total gross amount includes £1 million goodwill and £7 million software, which consists of £2 million of NuWealth's net assets and £5 million recognised by the Group on acquisition of the business. Total accumulated amortisation of £1 million relates to software in NuWealth's net assets. \n 9(b): Analysis of other intangible assets and software \n \n \n \n \n   \n \n \n     31 December      2024 \n \n \n    31 December    2023 \n \n \n Average estimated useful life \n \n \n Average period remaining \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n \n \n \n \n \n \n Net carrying value \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other intangible assets \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Distribution channels - Quilter Financial Planning \n \n \n 1 \n \n \n 2 \n \n \n 8 years \n \n \n < 1 year \n \n \n \n \n Customer relationships \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Quilter Cheviot \n \n \n 4 \n \n \n 32 \n \n \n 10 years \n \n \n < 1 year \n \n \n \n \n Quilter Financial Planning \n \n \n 12 \n \n \n 17 \n \n \n 8 years \n \n \n 2 years \n \n \n \n \n Quilter Cheviot Financial Planning \n \n \n 7 \n \n \n 10 \n \n \n 8 years \n \n \n 2 years \n \n \n \n \n Other \n \n \n - \n \n \n 1 \n \n \n 7 years \n \n \n - \n \n \n \n \n \n \n \n 24 \n \n \n 62 \n \n \n \n \n \n \n \n \n \n \n Software \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n NuWealth \n \n \n 6 \n \n \n - \n \n \n 5 years \n \n \n 5 years \n \n \n \n \n Quilter Financial Planning \n \n \n 2 \n \n \n 4 \n \n \n 5 years \n \n \n 1 year \n \n \n \n \n \n \n \n 8 \n \n \n 4 \n \n \n \n \n \n \n \n \n \n \n Total other intangible assets and software \n \n \n 32 \n \n \n 66 \n \n \n \n \n \n \n \n \n \n \n   \n 9(c): Allocation of goodwill to cash-generating units (\"CGUs\") and consideration of the need for an impairment review \n Goodwill is monitored by management at the level of the Group's two operating segments: Affluent and High Net Worth. Both operating segments represent a group of CGUs. \n \n \n \n \n \n \n \n   \n \n \n £m \n \n \n \n \n   \n \n \n 31 December \n 2024 \n \n \n 31 December \n 2023 \n \n \n \n \n Goodwill (net carrying amount) \n \n \n   \n \n \n \n \n \n \n \n Affluent \n \n \n 224 \n \n \n 223 \n \n \n \n \n High Net Worth \n \n \n 83 \n \n \n 83 \n \n \n \n \n Total goodwill \n \n \n 307 \n \n \n 306 \n \n \n \n \n Consideration of the need for an impairment review \n Goodwill in both the Affluent and High Net Worth CGU groups is tested for impairment annually, or earlier if an indicator of impairment exists, by comparing the carrying value of the CGU group to which the goodwill relates to the recoverable value of that CGU group, being the higher of that CGU group's value-in-use or fair value less costs to sell. If applicable, an impairment charge is recognised when the recoverable amount is less than the carrying value. Goodwill impairment indicators include sudden stock market falls, the absence of positive Net Client Cash Flows (\"NCCF\"), significant falls in profits and significant increases in the discount rate. \n The goodwill balance has been tested for impairment at 31 December 2024 and continues to demonstrate a surplus of the recoverable amount over the carrying value of the CGUs. As a result, no impairment is required. \n The following table shows the percentage change required in each key assumption before the carrying value would exceed the recoverable amount, assuming all other variables remain the same. This highlights that further adverse movements in the key assumptions used in the CGU value-in-use calculation would be required before an impairment would need to be recognised. \n \n \n \n \n   \n \n \n Affluent \n \n \n High Net Worth \n \n \n \n \n Reduction in forecast cash flows \n \n \n 65% \n \n \n 81% \n \n \n \n \n Percentage point increase in the discount rate \n \n \n 42% \n \n \n 48% \n \n \n \n \n Forecast cash flows are impacted by movements in underlying assumptions, including equity market levels, revenue margins and NCCF. The Group considers that forecast cash flows are most sensitive to movements in equity markets because they have a direct impact on the level of the Group's fee income. \n The principal sensitivity within equity market level assumptions relates to the estimated growth in equity market indices included in the three-year cash flow forecasts. Management forecasts equity market growth for each business using estimated asset-specific growth rates that are supported by internal research, historical performance, Bank of England forecasts and other external estimates. \n The Group has considered and assessed reasonably possible changes for other key assumptions and has not identified any other instances that could cause the carrying amount of CGUs to exceed its recoverable amount. \n Value-in-use methodology \n The cash flows used to determine the value in use of the groups of CGUs are based on the most recent management approved three-year profit forecasts, which are contained in the Group's Business Plan. These profit forecasts incorporate anticipated equity market growth on the Group's future cash flows and take into account climate-related risks and opportunities affecting operations, investments, advice and distribution, and their impact on specific projects and initiatives, estimates and judgements. After the three-year forecast period, the growth rate used to determine the terminal value of the groups of CGUs in the annual assessment was 2.0% (31 December 2023: 2.0%). \n The Group uses a single cost of capital (post tax) of 9.0% (31 December 2023: 10.0%) to discount expected future cash flows across its two groups of CGUs. The single cost of capital is based on the Group's consideration of the level of risk that each group of CGUs represents. Capital is provided to the Group predominantly by shareholders with a relatively small amount of debt financing. \n 10: Financial investments \n The table below analyses the investments and securities that the Group invests in, either on its own proprietary behalf (shareholder funds) or on behalf of third parties (policyholder funds). \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n   \n \n \n 31 December \n 2024 \n \n \n 31 December \n 2023 \n \n \n \n \n Government and government-guaranteed securities \n \n \n 171 \n \n \n 202 \n \n \n \n \n Other debt securities, preference shares and debentures \n \n \n 2,644 \n \n \n 2,175 \n \n \n \n \n Equity securities \n \n \n 11,034 \n \n \n 8,488 \n \n \n \n \n Pooled investments \n \n \n 45,510 \n \n \n 39,462 \n \n \n \n \n Short-term funds and securities treated as investments \n \n \n - \n \n \n 1 \n \n \n \n \n Other \n \n \n 1 \n \n \n 1 \n \n \n \n \n Total financial investments \n \n \n 59,360 \n \n \n 50,329 \n \n \n \n \n The financial investments are recoverable within 12 months, apart from £6 million (2023: £nil) which is recoverable after 12 months. The financial investments recoverability profile is based on the intention with which the financial assets are held. The assets held on behalf of policyholders cover the liabilities for linked investment contracts, all of which can be withdrawn by policyholders on demand. \n 11: Categories of financial instruments \n The analysis of financial assets and liabilities into categories as defined in IFRS 9 Financial Instruments is set out in the following tables. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IFRS 9, are reflected in the non‑financial assets and liabilities category. \n For information about the methods and assumptions used in determining fair value, refer to note 12. The Group's exposure to various risks associated with financial instruments is discussed in note 18. \n \n \n \n \n 31 December 2024 \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n £m \n \n \n \n \n Measurement basis \n \n \n Fair value \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n Mandatorily at FVTPL \n \n \n Designated at FVTPL \n \n \n Amortised cost \n \n \n Non-financial assets and liabilities \n \n \n Total \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Loans and advances \n \n \n - \n \n \n - \n \n \n 56 \n \n \n - \n \n \n 56 \n \n \n \n \n Financial investments \n \n \n 59,359 \n \n \n 1 \n \n \n - \n \n \n - \n \n \n 59,360 \n \n \n \n \n Trade, other receivables and other assets \n \n \n - \n \n \n - \n \n \n 370 \n \n \n 48 \n \n \n 418 \n \n \n \n \n Derivative assets \n \n \n 26 \n \n \n - \n \n \n - \n \n \n - \n \n \n 26 \n \n \n \n \n Cash and cash equivalents \n \n \n 1,215 \n \n \n - \n \n \n 734 \n \n \n - \n \n \n 1,949 \n \n \n \n \n Total assets that include financial instruments \n \n \n 60,600 \n \n \n 1 \n \n \n 1,160 \n \n \n 48 \n \n \n 61,809 \n \n \n \n \n Total other non-financial assets \n \n \n - \n \n \n - \n \n \n - \n \n \n 639 \n \n \n 639 \n \n \n \n \n Total assets \n \n \n 60,600 \n \n \n 1 \n \n \n 1,160 \n \n \n 687 \n \n \n 62,448 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Investment contract liabilities \n \n \n - \n \n \n 51,758 \n \n \n - \n \n \n - \n \n \n 51,758 \n \n \n \n \n Third-party interests in consolidated funds \n \n \n 8,225 \n \n \n - \n \n \n - \n \n \n - \n \n \n 8,225 \n \n \n \n \n Borrowings and lease liabilities \n \n \n - \n \n \n - \n \n \n 275 \n \n \n - \n \n \n 275 \n \n \n \n \n Trade, other payables and other liabilities \n \n \n - \n \n \n 1 \n \n \n 399 \n \n \n 106 \n \n \n 506 \n \n \n \n \n Derivative liabilities \n \n \n 53 \n \n \n - \n \n \n - \n \n \n - \n \n \n 53 \n \n \n \n \n Total liabilities that include financial instruments \n \n \n 8,278 \n \n \n 51,759 \n \n \n 674 \n \n \n 106 \n \n \n 60,817 \n \n \n \n \n Total other non-financial liabilities \n \n \n - \n \n \n - \n \n \n - \n \n \n 208 \n \n \n 208 \n \n \n \n \n Total liabilities \n \n \n 8,278 \n \n \n 51,759 \n \n \n 674 \n \n \n 314 \n \n \n 61,025 \n \n \n \n \n   \n \n \n \n \n 31 December 2023 \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n £m \n \n \n \n \n Measurement basis \n \n \n Fair value \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n Mandatorily at FVTPL \n \n \n Designated at FVTPL \n \n \n Amortised cost \n \n \n Non-financial assets and liabilities \n \n \n Total \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Loans and advances \n \n \n - \n \n \n - \n \n \n 38 \n \n \n - \n \n \n 38 \n \n \n \n \n Financial investments \n \n \n 50,329 \n \n \n - \n \n \n - \n \n \n - \n \n \n 50,329 \n \n \n \n \n Trade, other receivables and other assets \n \n \n - \n \n \n - \n \n \n 404 \n \n \n 43 \n \n \n 447 \n \n \n \n \n Derivative assets \n \n \n 57 \n \n \n - \n \n \n - \n \n \n - \n \n \n 57 \n \n \n \n \n Cash and cash equivalents \n \n \n 1,091 \n \n \n - \n \n \n 768 \n \n \n - \n \n \n 1,859 \n \n \n \n \n Total assets that include financial instruments \n \n \n 51,477 \n \n \n - \n \n \n 1,210 \n \n \n 43 \n \n \n 52,730 \n \n \n \n \n Total other non-financial assets \n \n \n - \n \n \n - \n \n \n - \n \n \n 615 \n \n \n 615 \n \n \n \n \n Total assets \n \n \n 51,477 \n \n \n - \n \n \n 1,210 \n \n \n 658 \n \n \n 53,345 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Investment contract liabilities \n \n \n - \n \n \n 43,396 \n \n \n - \n \n \n - \n \n \n 43,396 \n \n \n \n \n Third-party interests in consolidated funds \n \n \n 7,444 \n \n \n - \n \n \n - \n \n \n - \n \n \n 7,444 \n \n \n \n \n Borrowings and lease liabilities \n \n \n - \n \n \n - \n \n \n 279 \n \n \n - \n \n \n 279 \n \n \n \n \n Trade, other payables and other liabilities \n \n \n 1 \n \n \n - \n \n \n 476 \n \n \n 93 \n \n \n 570 \n \n \n \n \n Derivative liabilities \n \n \n 25 \n \n \n - \n \n \n - \n \n \n - \n \n \n 25 \n \n \n \n \n Total liabilities that include financial instruments \n \n \n 7,470 \n \n \n 43,396 \n \n \n 755 \n \n \n 93 \n \n \n 51,714 \n \n \n \n \n Total other non-financial liabilities \n \n \n - \n \n \n - \n \n \n - \n \n \n 112 \n \n \n 112 \n \n \n \n \n Total liabilities \n \n \n 7,470 \n \n \n 43,396 \n \n \n 755 \n \n \n 205 \n \n \n 51,826 \n \n \n \n \n 12: Fair value methodology \n This section explains the judgements and estimates made in determining the fair values of financial instruments that are recognised and measured at fair value in the financial statements. Classifying financial instruments into the three levels of the fair value hierarchy (see note 1 2 (b)) provides an indication of the reliability of inputs used in determining fair value. \n 12(a): Determination of fair value \n The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market exit prices for assets and offer prices for liabilities, at the close of business on the reporting date, without any deduction for transaction costs: \n ·      for units in unit trusts and shares in open-ended investment companies, fair value is determined by reference to published quoted prices representing exit values in an active market; \n ·      for equity and debt securities not actively traded in organised markets and where the price cannot be retrieved, the fair value is determined by reference to similar instruments for which market observable prices exist; \n ·      for assets that have been suspended from trading on an active market, the last published price is used. Many suspended assets are still regularly priced. At the reporting date, all suspended assets are assessed for impairment; and \n ·      where the assets are private equity investments or within consolidated investment funds, the valuation is based on the latest available set of audited financial statements, or if more recent is available, reports from Investment Managers or professional valuation experts on the value of the underlying assets of the private equity investment or fund. \n There have been no significant changes in the valuation techniques applied when valuing financial instruments. Where assets are valued by the Group, the general principles applied to those instruments measured at fair value are outlined below: \n Financial investments \n Financial investments include government and government-guaranteed securities, listed and unlisted debt securities, preference shares and debentures, listed and unlisted equity securities, listed and unlisted pooled investments (see below), short-term funds and securities treated as investments and certain other securities. \n Pooled investments represent the Group's holdings of shares/units in open-ended investment companies, unit trusts, mutual funds and similar investment vehicles. Pooled investments are recognised at fair value. The fair values of pooled investments are based on widely published prices that are regularly updated. \n Other financial investments that are measured at fair value use observable market prices where available. In the absence of observable market prices, these investments and securities are fair valued using various approaches including valuations based on discounted cash flows and earnings before interest, tax, depreciation and amortisation multiples. \n Derivatives \n The fair value of derivatives is determined with reference to the exchange-traded prices of the specific instruments. The fair value of over-the-counter forward foreign exchange contracts is determined by reference to the relevant exchange rates. \n Investment contract liabilities \n The fair value of the investment contract liabilities is determined with reference to the underlying funds that are held by the Group. \n Third-party interests in consolidated funds \n Third-party interests in consolidated funds are measured at the attributable net asset value of each fund. \n 12(b): Fair value hierarchy \n Fair values are determined according to the following hierarchy: \n \n \n \n \n Description of hierarchy \n \n \n Types of instruments classified in the respective levels \n \n \n \n \n Level 1 - quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets. \n \n \n Listed equity securities, government securities and other listed debt securities and similar instruments that are actively traded, actively traded pooled investments, certain quoted derivative assets and liabilities and investment contract liabilities directly linked to Level 1 financial assets. \n \n \n \n \n Level 2 - valuation techniques using observable inputs: financial assets and liabilities with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial assets and liabilities valued using models where all significant inputs are observable. \n \n \n Unlisted equity and debt securities where the valuation is based on models involving no significant unobservable data. \n Over-the-counter derivatives, certain privately placed debt instruments and third-party interests in consolidated funds which meet the definition of Level 2 financial instruments. \n \n \n \n \n Level 3 - valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more significant inputs are unobservable. \n \n \n Unlisted equity and securities with significant unobservable inputs, securities where the market is not considered sufficiently active, including certain inactive pooled investments. ...

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