Results webcast

Strategy update transcript

Jonathan Sorrell - Group CEO, Rathbones

Presentation

Introduction

Okay. Thank you, everyone. I hope you enjoyed the break, and welcome back. Rathbones today stands at a moment of real opportunity, better positioned than we were two years ago, more settled than we were a year ago and more focused than any time since I joined.

Over the past two years, we have succeeded in completing the largest integration in our industry's history to create a platform that is ready to perform. As Clive said, that involved enormous hard work, resilience and professionalism. To our colleagues around the firm, I would just like to thank them for that extraordinary effort.

To Paul Stockton and the team that delivered that integration, thank you for the opportunity that you have given us. To our partners at Investec, thank you for your continued support. That chapter is complete, and now we move forward.

Our vision is to build the best wealth manager in the UK by far, not because we are there now but because we aspire to set the standard in our industry. That is what our clients expect and deserve, and it is what we are committed to delivering.

We operate in an attractive market that offers long-term growth, and we are already one of the leaders within it. We have the scale to invest in our capabilities. Our client base is strong. Our people are terrific, and our brand built through generations is trusted. Those are real advantages.

We do recognise that those advantages have not yet translated into organic growth. Recently, our growth has just not reflected the strength of our capabilities. Net flows have not been where they have needed to be. Our focus now is on execution and on delivering sustainable organic growth. The responsibility for that execution sits with me and our executive team.

One day, we will have the opportunity to participate in further consolidation in our industry, and we should be able to create very significant value when we do. Today, the greatest value is to optimise what we already have.

If we execute well, our business has a powerful value creation algorithm:

• Durable growth across the cycle, whether that is through flows or performance
• Improving operating margins
• Strong capital generation

All result in compounding shareholder returns, whether through earnings growth or multiple expansion.

Today, I will set out where we are, why the opportunity is compelling and how we will measure progress. We have the platform. We have the team. We have the strategy. And now we must prove it.

Where we have come from and where we are now

Before we look forward, it is worth remembering where Rathbones has come from. In the last two decades, the business has increased tenfold in terms of assets under management as a function of around a dozen deals, culminating, of course, in the combination with IW&I itself, the product of several acquisitions. That means, today, we run £116 billion of assets for over 119,000 clients.

That scale is not the objective in and of itself, but it does give us the ability to invest in our people, in our technology, in our investment and financial planning capabilities and to deliver ultimately better outcomes for clients.

An industry offering attractive secular growth

Now the market we operate in offers real growth potential. UK household wealth stands at some £2.8 trillion and is expected to grow to £3.5 trillion by the end of the decade. One of the fastest-growing segments within that is clients with £1 million to £5 million of assets, and that is exactly where Rathbones is most concentrated.

Demographics, regulation and significant intergenerational wealth transfer are driving sustained long-term demand, while the UK remains structurally underinvested in equities with too much wealth invested in cash. This is not a cyclical opportunity. It is rather a long-term structural one.

A targeted and segmented approach to growth

Now this slide is actually my happy place, where our opportunity becomes very real. We have identified a target market of nearly three million people in the UK who fit our potential target client profile. Today, we just serve 119,000 of them. That gap tells you everything that you need to know about the scale of the opportunity in front of us.

This is not about stretching our proposition or chasing marginal targets. It is about reaching far more of the right ones earlier and quicker. We, and when I say we, Simonetta knows exactly who they are, where they are and what they need, and we have low share across every segment. That gives us confidence to be much more intentional through digital acquisition, partnerships, business development and referrals in taking Rathbones to the market.

Our right to win a client

Now the value of our business is in the longevity of our client relationships. The earlier we get clients onboard, the better. Instead of thinking about minimum account sizes, we want to think about the present value of our relationships. We are not going to wait for that growth to come to us. We are going to go out there and find it.

We have a leading position in a market with long-term growth potential and a sizable opportunity ahead of us. We also have a right to win, which comes down to three things that are really hard to replicate.

First of all, we are a pure-play wealth manager. We are not competing for resources with other parts of a broader group. We are not a distribution channel for someone else's products. That focus and specialism really matters to our clients and to our people.

Second, we deliver comprehensive advice through a single long-term relationship, whether it is investment management, financial planning, trust, tax, banking, legal, not as fragmented products but as integrated counsel. Clients do not want to coordinate multiple advisors, and they want one trusted relationship that understands their full picture. This means we deliver excellent service standards. It is not just us saying it but our clients, for example, through our Trustpilot score of some 4.9, which is industry leading.

Third, we have built deep expertise in segments where this model matters the most. Our private office, our charities, our court of protection businesses, ethical investments, intermediaries, international clients. These are not mass market segments. They require judgment, continuity and trust that is built over years, not quarters.

Add to that our national footprint, our growing digital capabilities and the credibility that comes with the scale that we have, our public company status and a strong balance sheet. That is our right to win, and very few firms can match the quality, the depth, the continuity and the trust that we bring to clients. Even fewer can do it with scale whilst constantly raising standards.

How we think about our business

We talked about the market opportunity, the clients that we are targeting and why our proposition stands out. The next question is how do we deliver this consistently at scale without losing what makes us distinctive.

Wealth Management and Asset Management

The answer is that we built the business around two complementary capabilities.

First, Wealth Management. Over 700 client-facing advisers with deep tenure, 17 years on average for investment managers, 10 for financial planners, and that continuity matters because we know wealth is personal and long term. Clients get breadth and choice, full discretionary management, managed solutions, platform propositions and increasingly deep financial planning. We can tailor service intensity without losing the relationship model.

Second, institutional quality investment capabilities through Rathbones Asset Management. RAM is a really special business. In my last three roles, I have met about 2,000 investment firms around the world, and it is exceptionally rare to see a culture that has produced sustained alpha over such a long period of time.

RAM was established in 1989. It now manages £16.6 billion across 29 funds. The team combines a boutique focus with strong discipline, 37 investment professionals averaging 25 years of experience, 16 of which are at Rathbones itself.

How Asset Management enhances the Wealth proposition

Here is why that matters for our clients. RAM directly enhances our wealth propositions where it delivers clear performance advantages. The multi-asset engine powers our Managed, Select, and MPS offerings with scale and consistency. Our growing range of single strategy funds strengthens that even further.

RAM also drives our unified sustainability and stewardship approach. By bringing together Greenbank stewardship and RAM's research teams, we apply one philosophy across all propositions, including charities. That is one standard and one approach. The result is better outcomes, greater efficiency and more consistent wealth proposition across the Group.

RAM operates at arm's length with clear governance and oversight, ensuring accountability and keeping the focus firmly on client outcomes. It still though allows that expertise to flow across the Group. We use RAM funds only where they deliver clear performance advantages for clients, and that discipline protects both the relationship and the outcomes. This is a wealth-led business strengthened by disciplined investment capabilities.

Our vision

To be the best wealth manager in the UK, by far.

With that foundation in place, let me now turn to our vision and what it means in practice. As I said, our vision is to be the best wealth manager in the UK by far, again, not because we think we are here today but because we think this business has all the ingredients it needs to set the standard in our sector over time.

Being the best for us is not about scale for its own sake. It is about delivering consistently strong outcomes for clients and building a business that performs sustainably through cycles. The question is not what we aspire to be. Now it is how we turn that ambition into reality and how we hold ourselves to account along the way.

What this means

So turning that vision into action means being clear about what excellence looks like in practice. For Rathbones, it comes down to four things. First, we must be the first choice for clients. That means:

• Having a world-class investment capability
• Advice that supports clients through their entire life cycle
• A service experience that is proactive, personalised and effortless

Second, we must be the first choice for talent because long-term client outcomes depends on the quality and the motivation and the judgment of our people.

Third, we have to be a really effective operator, simplifying how we run the business, using data and technology intelligently and allocating capital with real rigour.

Finally, we are going to be the most reputable brand in our market, one that earns trust consistently through how we behave, not just what we say.

These are demanding standards. We are deliberately setting the bar high, and we will measure ourselves rigorously against each of them. Progress will be transparent and performance will be clear.

The first choice for clients

Those are the four standards we are holding ourselves to. Let me now take each in turn, starting with the most important one, being the first choice for clients.

As I say, to be the first choice for clients, three things matter above all else:

• First, the world-class investment capability because long-term outcomes are the foundation of the trust that we have with our clients
• Second, advice and solutions that are honed for the entire client life cycle, supporting clients not just at a point in time but as their circumstances evolve, and as Camilla is fond of saying, the right advice to the right client at the right time for the right cost
• Third, a proactive, personalised and effortless service experience because performance is not enough in and of itself

World class investment capability – Wealth

Let me start with our investment capability in Wealth, and then I will move on to Asset Management. At its core, Rathbones is a long-term investment house built on judgment, discipline and stewardship of capital. We think in years and decades, not quarters, and we approach investing with a real ownership mindset.

Our portfolios are constructed deliberately with thoughtful diversification, active risk management and a total portfolio perspective so that clients' capital is protected in difficult markets and positioned to compound over time. It is not about chasing short-term performance or fashionable themes. It is about consistent decision-making, valuation discipline and accountability for outcomes.

With a new CIO in place, subject to regulatory approvals, we are strengthening our investment philosophy, sharpening that accountability and raising the bar on consistency, importantly, while preserving the judgment and independence that have always defined us.

That combination, the long-term thinking, the disciplined risk management and accountable decision-making is what we believe defines a great investment house, which is what we aspire to be.

World class investment capability – Asset Management

Let me say a word on Asset Management because it matters, as I have said, to how this Group invests and how we think about capital.

Rathbones Asset Management is genuinely differentiated not because of any one individual but because of the culture and the structure it has built over time. As I say, it is rare to see a business that has supported such consistent alpha generation over long periods without drifting into a hero culture or style dilution.

The model is deliberately simple: small, empowered teams supported by high-quality external and internal research, making independent high conviction decisions. That clarity of responsibility is important and portfolio managers own their outcomes. Crucially, though, that freedom is balanced by strong institutional oversight. We have implemented Charles River and MSCI BarraOne to ensure that every risk taken is intentional, measured and continuously monitored.

The underlying philosophy then essentially mirrors wealth, invest in quality businesses at sensible valuations, diversifying intelligently and adjust positioning as conditions change. The smaller teams retain that agility and judgment that many larger organisations might lose, and that is without sacrificing discipline.

Advice and solutions honed for the entire client lifecycle

The second pillar of being the first choice for clients is advice that supports them across their entire lives, and financial planning is central to that. Today, planning penetration is around 14% by FUMA and 11% by client.

With SHL now fully integrated, planning is happening more organically, but increasing penetration is a behavioural and a cultural shift across the Group. This will build steadily rather than overnight, and we are certainly realistic about that. But where planning is embedded well, the impact is very clear. Offices like Manchester and Newcastle have developed, what I would call, a natural reflex to bring financial planners into client conversations. That just creates a stronger, more joined-up proposition, and it is driving better flows. You see it in the numbers, deeper relationships and stronger retention.

Planning really anchors the relationship across tax and retirement cash flow and succession and gives us continuity through generations. It moves us from managing portfolios to helping clients make better decisions over time. That is why the disciplined expansion of financial planning is one of the most important drivers of both better client outcomes and sustainable organic growth.

I will just give you a very simple illustration of how this works in practice. In a number of cases, we already might manage a meaningful portfolio for one family member, while other assets sit elsewhere, often in pensions or outside the immediate relationship.

By bringing financial planning into the conversation, we are able to identify those assets, align them to a client's wider objectives and consolidate management where it makes sense. That not only brings additional assets under advice, but it also surfaces future flows and opens up conversations around succession and intergenerational planning.

What matters most is that, that pattern is repeatable. So where teams really embed planning naturally, as I say, we see stronger flows, deeper relationships and better retention.

As I say, performance and advice only goes so far and clients also expect a service experience that feels personal and effortless. Our teams deliver this every day. With long-tenured investment managers and financial planners, clients benefit from real continuity, people who know them, understand their circumstances and provide consistently high levels of satisfaction through regular personal interaction. That human relationship remains the differentiator, particularly as clients' lives and finances become more complex.

Proactive, personalised and effortless service experience

Client expectations are evolving, and we are deliberate about how we use technology to support that. We are investing in hybrid digital delivery to give clients flexibility and choice in how they engage with us, while maintaining the human connection that sets us apart. As part of that, we have listened carefully to client feedback following the migration. There were features in the Investec app that clients valued, and selectively, we are bringing many of those capabilities back where they improve the experience.

At the same time, we have to be very clear about what we are and what we are not. Rathbones is not a DIY platform and our app does not need to replicate every possible function as a result. Its role is to give clients clarity, visibility and ease, acting as an extension and not a replacement of the advice or the relationship.

When I joined Rathbones, I became a client. I used the MyRathbones App most days. And I give the team plenty of feedback on how to make it better, and I know they appreciate that enormously. But jokes aside, this does reflect a real step change in how we serve clients digitally. In recent months, we have introduced value over time reporting. We have improved accessibility, and we have strengthened resilience behind the scenes by removing dependencies on overnight processes amongst other things.

That is exactly how we are modernising. The human relationship stays absolutely central and digital simply makes the experience clearer, easier and more effortless for our clients.

That is the promise to our clients. Now let me show you how we measure whether we are delivering it.

How should we be measured?

Turning our vision into action.

Before you all get too excited, we are not going to set explicit targets in every area that you see here. Instead, what we are doing is giving you ways of seeing how we are progressing against the standards that we have set ourselves. These are metrics we monitor very closely internally.

It is also important to be realistic. This is a journey. It is not an overnight shift, and these indicators are not going to move in a straight line, and we do not expect to be best-in-class immediately. What matters, of course, is the direction of progress over time.

Because many of these measures are more meaningful over longer horizons, we will report on them annually. Starting with investment capability. In Wealth, we will track for you asset-weighted annualised performance over three and five years versus ARC. In Asset Management, we will look at the percentage of assets outperforming benchmark or objective over one and three years.

Second, financial planning penetration. As I mentioned earlier, we see a clear opportunity to learn from those top-performing offices and embed those behaviours more consistently across the Group.

Third, our Trustpilot rating. It is just one measure, but it is a proxy, if you like, for whether we are delivering a proactive, personalised and effortless experience, although this is something that Simonetta ensures we measure in many ways with samples of our client base.

Over time, improvement across these measures should translate into better outcomes and ultimately stronger, more sustainable flows. Those are the measures that we will use to show progress as the first choice for clients. If we are the first choice for clients, we will be well on our way to being somewhere that people want to work.

The first choice for talent

As I outlined, none of what I outlined is deliverable without the right people in the right environment, and to achieve our ambition, we also have to be the first choice for talent.

If we want to deliver for clients and grow sustainably, we need people who choose Rathbones. They stay at Rathbones. They develop their careers at Rathbones, and they do their best work here. That, for us, comes down to three things:

• A great culture to work in
• The right incentives to attract, retain and motivate our people
• AI-powered tools and processes that make doing business easier rather than harder

Let me take each of those in turn.

A great culture

Our culture is one of Rathbones' greatest strengths, and it is built on:

• A total commitment to clients
• A long-term mindset
• Collaboration
• Deep relationships developed through long tenure

To deliver our strategy at the pace that is required, we just need to sharpen some of those behaviours. We need greater clarity and simplification, so teams focus on what matters most. We need more pace and intent with decision-making, and we need collaboration that brings in diverse views without slowing us down. Like all strengths, if overplayed, they become a risk. Bespoke approaches can add complexity. Consensus can slow decisions and long tenure without progression can dilute accountability.

Our aim is simple. It is to keep what makes Rathbones special while strengthening the behaviours that will help us grow and succeed in our next chapter.

A great culture – introducing the Rathbones Institute

Now our long-term success depends on the quality of our people across the whole organisation. Skills, knowledge, judgment and stewardship matter everywhere at Rathbones, whether you are managing investments, advising clients, supporting front office teams or enabling the business to run well. We want it to be clear to everyone what great looks like, how careers can develop here and what is required to progress.

Today, our training is comprehensive. It is functional but perhaps a little fragmented. It builds technical capability in pockets, but it does not consistently develop institutional judgment at scale.

At the same time, our industry faces, as we know, a growing shortage of experienced financial planners. And if we want to grow sustainably, we need to train more of our own. I am very excited to say that our new Rathbones Institute will address both. It is going to create a unified approach to developing capability across the firm, strengthening technical expertise, deepening judgment and client stewardship and making career paths and expectations clearer and more consistent.

It will support the next generation of investment professionals, planners and leaders while also raising standards and consistency across the whole organisation. The model is deliberately focused and scalable: a senior leader soon to be recruited, a small central team and an AI-enabled digital learning platform supported by internal and external networks, not in a large stand-alone academy.

Costs will remain manageable, I assure you. Launching in 2027, the Rathbones Institute will strengthen our culture, deepen our talent pipeline, enhance the client experience and support long-term growth.

Motivating incentives

The second pillar of being the first choice for talent is making sure our incentives drive the right behaviours. We want every decision at Rathbones to start with a simple question, how does this help our client? Everyone contributes here to the client experience, so everyone has a role in growing the business, and our incentive structures now reflect that.

For front office teams, we introduced a new remuneration scheme this year. It is simple, transparent and formula-driven, reinforcing sustainable growth and the behaviours that matters most for our clients.

For enablement teams, we have introduced the Rathbones Growth Unit Scheme. This is paid in shares over three years and linked to improvement in net flows in wealth, and it ensures that colleagues who support client-facing teams share directly in the value that they help create. Together, these incentives send a clear message: when we grow in the right way, deliver for clients and work as one team, everyone shares in that success.

AI-powered tools and processes to make doing business easy

Now this slide brings together our approach to AI, and more broadly, how we are using technology to make doing business easier across Rathbones. We recognise we are still just in the foothills of the application of AI, but the potential is real, and we have only just seen its impact.

Our approach is pragmatic. It is governed and it is value-led. Copilot is now enterprise-wide. In the front office, AI is improving suitability processes and oversight. Across our data and client platforms, AI is already giving us cleaner data and much sharper insight.

But one thing we have definitely learned is this. Technology only works as well as the processes beneath it. Alongside AI, we have been doing a lot of work to simplify and modernise core processes so that the technology can deliver at its best.

We have set up what we call two swim lanes. The first is removing friction, and we identified, back in the summer, about 100 friction points in the business that have already been addressed. We have actually knocked about 80 of them on the head. As people see those issues being fixed, they have surfaced about another 75, which is exactly what you want, a culture of continuous improvement rather than just acceptance of workarounds. But I use those numbers to demonstrate the intensity with which we are addressing those issues.

The second swim lane is reinventing some of our core processes. This is a big opportunity. We started with onboarding and a team disaggregated that process into around 1,000 features. And we have identified 90 improvements that are in the pipeline. We are about a quarter of the way through at this point because this is where productivity and the client experience are won or lost.

Looking ahead, the next phase is deeper integration, extending AI right into core workflows with governed agents across all functions, front office, finance, risk, compliance, people and so forth. On AI itself, the potential is huge. We do not know exactly how long this is all going to take, but the rate of improvement is really encouraging.

If we systematically embed these capabilities into how we operate and advise, the prize is significant, higher quality of service, much cleaner execution and materially better productivity, all while keeping human judgment and relationships at the centre.

We are delighted to have Brad here leading the charge in this respect, and as I commented earlier, he does seem a little high on AI, which is great.

How should we be measured?

Turning our vision into action.

Whether it is culture incentives or technology, the common thread is the same. We are trying to make it easier for our people to do great work. As with clients, the key question is how do we know this is working? That brings me on to how we measure progress as the first choice for talent.

We will measure and report progress on this goal. The first is employee engagement because people, obviously, who are engaged do better work, make better decisions and better outcomes are delivered for clients. The second is the retention of high-performing and high-potential colleagues. That tells us whether people see a future for themselves at Rathbones and whether our culture, development and incentives are working.

The third is the adoption of AI and digital tools across the business, not as a technology scorecard but as evidence that processes are becoming simpler and that our people have better tools to do their jobs well.

These are not the only measures we use internally, but they provide a transparent way for you to see whether we are creating an environment where people can thrive and whether that is translating into stronger execution, and over time, better outcomes for our clients.

The most effective operator

Our third strategic objective is to become the most effective operator in our industry. For us, that comes down to three things.

• First is sharpening our commercial focus, using data consistently to guide decisions and allocate effort where it creates most value
• Second is simplifying how we operate, so the firm is integrated, efficient and genuinely easy to do business with for clients and colleagues alike
• Third, applying real discipline to how we deploy capital, ensuring that every investment we make earns its place and delivers meaningful returns

I will take each one of those in turn, starting with commercial excellence.

Data-led commercial excellence – inflows

Let us talk about how we use data to improve the quality, consistency and effectiveness of our commercial performance across both inflows and outflows.

Our first priority in becoming a more effective operator is sharpening this commercial performance. We are doing that by using data far more consistently across the business. To put this into context, currently, we generate about half of our flows from existing clients and the other half from new clients, a sign, if you like, of strong relationships and strong market appeal.

The question then is, how we build on that momentum? We are doing that by focusing on the segments where we create the most value, for example, professionals, business owners and executives, supported by stronger brand visibility and more targeted digital acquisition. Within our existing client base, financial planning, as I have said, remains a powerful lever for engagement and ultimately, share of wallet.

At the same time, we are reshaping client-facing teams, so they have the capacity, capability and data to act earlier and more effectively, supported by a much more integrated approach across Jayne's world in distribution, Sim in marketing and Camilla in Wealth.

I just want to give you one illustration of the behavioural shift that this is driving. This is one of my favourite stories from my time at Rathbones so far. We have been working with a small group of colleagues. We have christened them the cubs, who have been in the firm for about 10 years, generally actually from graduates. They were looking for opportunities to go out there and win new business.

We started with a small pilot group, supported by coaching and by data. They collectively, this is 12 people, reached out to about 1,000 prospects in the first 12 weeks. The early results from that outreach are really encouraging. That group of 12 has now scaled to a group of 75 across the front office, all of whom are now embarking on the same thing. That embodies exactly what we are trying to do. We want to go out to where the business is. We want to do it in a way where we support people with coaching, make it more effective with data. Who knew, it is easier than people thought, and it is a lot more fun. It is going to be really rewarding because of the incentive scheme that I mentioned earlier.

All of this is underpinned by more rigorous performance management and commercial excellence coaching, and that is going to drive consistency and productivity and ultimately, stronger inflows.

Data-led commercial excellence – outflows

We are applying the same thought and discipline to outflows. Again, to provide context, roughly 60% of our outflows relate to spending, and the rest is split equally between mortality and taxes on the one hand and client departures on the other.

Our focus is on:

• Identifying risk earlier
• Acting more consistently
• Meeting more client needs within Rathbones

We are introducing a predictive AI-enabled model that flags assets at risk sooner, giving advisors more time to intervene. And that is alongside a standardised business-at-risk playbook so that our responses are consistent and effective.

We are also strengthening our proposition at key moments, including retirement and expanding services that deepen loyalty. As I have said earlier, financial planning remains one of the most powerful levers for retention. When clients move to a holistic plan, engagement and longevity increase materially.

I will give you an example. A long-standing family that has more than £10 million of assets with us told us they were considering moving to a competitor, offering a so-called one-stop shop as they entered retirement. Because of the strength of the relationship we had, they were open about it, and we responded quickly, bringing together investment management, planning, legal and trust expertise in a single coordinated conversation. That client chose to stay. They expanded their use of financial planning, and they are now transferring additional assets as part of a multigenerational estate planning exercise. This is now the Camilla-Jayne playbook for rescuing situations and making something of them.

The point is straightforward. We act early and present a genuinely integrated One Rathbones proposition. We retain assets. We deepen relationships and create more value for clients and then the shareholder.

Simplified operations

The second part of becoming the most effective operator is simplifying how we run the business. Post integration, we saw clear opportunities to remove complexity, strengthen alignment and operate in just a much more focused and efficient way.

First is our operating structure. We are going to bring related capabilities together to work as a unified team. A good example is integrating Greenbank's expertise into RAM and our central research teams, creating a single sustainability centre of excellence with consistent research and stewardship across propositions.

Second is governance. I have yet to meet anyone at Rathbones who wants another committee. We are streamlining governance. We are reducing duplication, and we are simplifying decision-making so that accountability is clearer and pace improves.

Third, systems and efficiency. You heard earlier about extending Salesforce and replacing systems that were not working for us. Our new COO, Mike Turner, along with Brad, our CTO, is leading a unified programme to modernise systems so that they are faster, cleaner and more aligned to how we want to operate.

Enterprise AI tools now have about 95% adoption rates, automating routine work and reducing friction. Together, these changes are making the organisation less siloed, more connected, more effective and freeing up time for our people to focus on clients.

Capital efficiency

The third pillar of being the most effective operator is capital efficiency. We are applying much greater discipline to how we deploy capital. That means being selective about technology investments, ensuring that our marketing spend is directly attributable to flows and only pursuing team hires when it strengthens our organic growth trajectory. Every investment has to earn its place and improve returns on capital.

Over time, this approach:

• Drives continuous improvement in how we operate
• Improves returns on invested capital
• Ensures that growth is both sustainable and value-accretive

Capital discipline is the final enabler, making sure every investment earns its place and improves how we operate.

How should we be measured?

Turning our vision into action.

The question then, how do we know this is working, and that brings me on to how we will measure our progress.

Our primary focus is a return to net inflows in Wealth. We are not setting a specific target or time line, but we firmly believe this is achievable now that integration is behind us and the organisation is aligned. We also want everyone to think of themselves as client-facing, and we will therefore monitor client-facing hours per advisor with the explicit aim of stripping out inefficient processes and freeing up time for advice, conversations and outreach.

Finally, we will apply strict discipline to capital allocation using return on capital employed as a core measure, ensuring that every investment, whether in marketing, technology or people, earns its place. That is how we drive execution through commercial focus, operational simplicity and capital discipline and how we measure progress along the way.

The most reputable brand

The final pillar is about how we are known. To sustain growth and earn trust over decades, we also need to be the most reputable brand in our market.

Rathbones was founded in 1742, and that heritage really matters. That reputation, it is not inherited, it is earned every day through how we behave and how we deliver consistently. Our focus is on three things:

• A relevant and distinctive identity
• Clear leadership grounded in purpose
• Efficient amplification so that what we stand for resonates more strongly with the audiences that matters most

It is not just about being louder. It is about being clearer, more consistent and more trusted.

Relevant and distinctive identity

We are building a brand known for consistent, unconflicted delivery of client outcomes.

In 2025, we refreshed our identity and our purpose, “Invest well. Live well.” This was not just a cosmetic exercise. It reflects what Rathbones has always stood for, helping clients make good decisions with their money so they can live the lives they want, expressed in a way that is clearer, more human and more relevant today.

The characteristics you see on this slide underpin how we run the business:

• Long-term thinking
• Unconflicted advice
• Deep relationships
• High integrity

Feedback from clients has been really positive, and importantly, the refreshed identity resonates with a much broader demographic, which obviously matters if we want to grow while staying true to who we are.

Demonstrating leadership and purpose

Reputation in our industry is built on trust, and trust comes from expertise, judgment and consistency. We build that trust by contributing meaningfully to the conversations that matter to our stakeholders, whether that is clients, colleagues, the media, policymakers or the communities that we serve.

Through thought leadership, policy engagement and community outreach, we bring relevant expert insight. We look for areas where we have deep expertise and where our voice adds value: in pensions, the budget and so forth. This is about showing leadership through real substance and in reinforcing that Rathbones is a firm that people can rely on through cycles.

Efficient amplification to our core audiences

An integrated channel ecosystem to build visibility and engage with all our audiences.

The third element is efficient amplification, making sure our reputation and expertise are visible where it matters. This has been an area transformed in the last 18 months or so.

Our marketing, digital and public relations team work as one, amplifying content and insight through our own channels but critically through earned and paid media, social platforms and independent client review sites.

We also bring the brand to life locally, events that matter to the communities in which we operate. Those events actually remain the bread and butter of client engagement in our industry, and we really do run some exceptional ones from the Chelsea Flower Show to LAPADA to our box at Lord's, where I am still awaiting my invite, just to mention. I am a client.

What really differentiates us is discipline. We track the commercial performance of every event, and Simonetta and her team use a rigorous methodology to attribute flows properly and understand returns on marketing investment.

Last year alone, when our activity is just getting up and running, our marketing activity as a whole generated more than £500 million of flows. It is a clear example about how thoughtful brand visibility delivered with total discipline converts directly into growth.

How should we be measured?

Turning our vision into action.

To understand whether we are building the most reputable brand in our market, we track three objective measures: First, client advocacy. We monitor our NPS and our position relative to peers. The NPS is 63. That puts us second out of the nine in our peer group that we monitor, and that is a strong foundation that we want to build on.

Second, corporate reputation. This is assessed independently through an external reputation index using public data, and it forms the baseline for a more comprehensive measure now in development. As our identity purpose and leadership activity build momentum, we expect to see progress here over time.

Third, prospect visibility. Our brand awareness and consideration among clients with more than 250,000 of investable assets today, that awareness figure sits at 33%, measured again through an independent national survey, and improving it is a clear opportunity.

Together, these measures give us a rounded objective view of brand performance, how clients feel about us, how we are perceived publicly and how attractive we are to future clients.

Entering a new chapter

Uniquely positioned to be the best wealth manager in the UK, by far.

Rathbones is entering a new chapter, and we are a leading player in an attractive and an expanding market. We have a strong right to win, supported by breadth, service and reputation. We have a clear strategy focused on organic growth, and we have a new executive team that is ready to deliver. I believe we are uniquely positioned to be the best wealth manager in the UK by far.

Thank you. Now we will go to Q&A.

 

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Questions from the audience and answers from Jonathan

Rae Maile (Panmure Liberum): Jon, you have laid out an awful lot which needs to be done over the course of the next one, two, three years. Out of all of those things which you have discussed today, what are the two or three which are most important to be cracking on with right now? Can you talk a little bit about the internal hurdles to actually achieving any of those?

Jonathan Sorrell: Look, this is, as you say, a pretty detailed strategy, and we are very clear on what we need to do here to drive growth. If you are forcing me to say what the two or three things are, if I had a button to push, it would be to put great technology into this business. That is the foundation of a lot of what we are talking about.

Inculcating an appropriately commercial culture in the organisation is a huge win to come. I talked about that group of cubs. It is just such an encouraging initiative with huge amounts of potential.

Look, we have to make sure that from a process perspective that we make it really super easy to do business at Rathbones, and that will be the lubricant in the machine, the engine to get all of this going. If you are going to force me to name three things, that is it.

David McCann: Three questions linked to that presentation, Jonathan. First one, you touched on the new variable comp structure. Can you just give us some colour on what are the key drivers of that? What is actually going to motivate people? What do they actually care about, so we can judge that? Beyond variable pay, in this quest to deliver more flow, do you think you are going to have to invest more in capacity than you have already got, so more people, more systems and so forth? You touched on some of it in the shorter term. I guess what I am getting to here is, is the 30% operating margin target beyond Q4 of this year, is that actually sustainable if you have to invest a bit more to actually get these flows that we all want?

Then finally, I know you are not going to give any specific targets on the flows. You said that a number of times today, but you have said you want to be the best wealth manager in the UK. To my mind, the best scaled player in this market is delivering above 5% net organic growth. Is that ultimately where you need to be longer term if you are going to be the best in the UK?

Jonathan Sorrell: Okay. Thank you. On the new comp structure, essentially, it is team-based and formula-driven, as I say. There is a percentage of revenues that are paid to the team and their bonus is that percentage of revenues less their bonus, certain expense items, but it is done in a very clean, simple way. What that does is motivate people to bring business in, and if they retain that for a long period of time, they can do very well out of that. It is nicely aligned in that respect. That whole compensation structure, as you would also expect, is subject to conduct requirements and so forth.

Second, do we need to invest more in capacity? That is why the Rathbones Institute to me is so important. We want to give fabulous career paths to people in the business. One thing Rathbones has done exceptionally well actually from what I can see is take graduates in. At a scale, it is quite big actually for a business of our size, and develop their careers over the long term. What I have noticed is you often meet people who, as with that group of cubs but elsewhere in the business, have started at Rathbones and are still here 10 years later. That tells you quite a lot about how special the place is.

Through that institute, people will have a mechanism where they can say, if I want to go on career path X, Y or Z, I know precisely what I need to do. My point to your question on capacity is there is a capacity in the industry generally in terms of the availability, the number of financial advisors and so forth. So we really want to develop our own wherever possible.

We think that we can absorb the investment that is required in everything that we just talked about within our existing cost base as we seek opportunities to simplify and automate the business and get productivity gains through AI. We would not be shy in time. If we find a great way to allocate capital in our business, we would not be shy about coming back and explaining that and telling you how we are going to invest that money.

At the moment, in our base case, we think, as I say, that investment is absorbable. That takes you on to your question about the margin, which is a perfectly reasonable one. I am just very conscious, as we are, as a team, of all the things that go into a margin target. We had something very specific for Q4 of this year, driven by the delivery of the integration benefits that we had spoken about.

I have known you for a long time, David, and that goes back to Man days. You know that we are going to operate with real discipline, but we are committing to that margin target for Q4 and not beyond.

On the net flows, you are right to put the aspiration for net flows in that context. There is no time scale, as I said, on hitting that. But as you say, that is a reasonable measure to point out in terms of what success looks like for flows.

Speaker: Two. I am a bit surprised not to have any numbers even on a two to three-year view because you have levers. You have the excess capital lever. You have the cost lever as well. I was wondering what made you cautious in a way? That was the first one.

The second, a little bit cheeky. When you arrived, you said that you wanted to be the best wealth manager in the UK. I noticed that today, you want to be the best wealth manager in the UK by far. I was wondering where that came from.

Jonathan Sorrell: On the no numbers. I do not think in a business like this, it makes sense to set an artificial arbitrary target within an even more arbitrary time frame. This is all about consistency of purpose and delivery, delivery, delivery. What we have done is given you measures where you can see the progress that is being made that should translate into those sustainable flows. That is a really long way of not answering your question.

On the point about the by far, we, as a GC, have spent several days debating our strategy, debating what our vision should be and what our aspirations should be. The by far comes from us as a group, which is that we look at where we are in the industry. We are amongst its leaders. We punch a little bit above our weight actually in terms of our win rate on new business as we look at situations that are in our pipeline. That is our aspiration, and that is the standard that we want to set for ourselves, and that is a good thing.

Christiane Holstein: Just three questions. Firstly, on timing. I know you have not given any explicit time frame. How quickly do you expect to start to see the benefits of the strategy? At what point do you expect a meaningful improvement in your targets?

My second question on costs. You have not outlined any additional costs to put this in place, but some of the initiatives do seem like they might need costs. For example, the institute or restructuring of staff remuneration. Just wondering where those costs are going to be reallocated from?

Then thirdly, on culture. This is obviously quite a big component of your target. There seems, over the past six months, that there is been quite a few changes within Rathbones, whether that is the integration of IW&I or the new leadership team and everything. Just wondering how staff morale is, attrition, how that is going internally?

Jonathan Sorrell: Thank you. On the time frame, it would be reasonable to say that you would want to start seeing some level of improvement within a 12-month time frame, but it is not going to be a marked change. Then if you do not see a meaningful change over a three or four-year period, there is probably someone else sitting here explaining that to you. I have accountability for the delivery of that sustainable organic growth.

On the cost side, you mentioned two things. As I said, as an overall point, we think we can absorb these costs within our existing cost base as we simplify and automate elements of our business. The institute, as I say, is not a big shiny new building. It is a small team. We are in the process of recruiting a senior leader. There will be a few people around that person. The training platform is digitally enabled.

Let us just put the context of the hiring piece, if I can put it like that, alongside the cost of not having a shiny new building. Look, we have 125 financial planners today, and as I said, we have 11% penetration by client, 14% by FUMA. You look at the most effective offices and they are operating at a penetration rate of 35%, 40%, something like that. I am not sure where we can end up over time, but let us just say for the sake of argument, it is somewhere between the two.

You are going to have some big productivity gains from technology in the intervening period. Let us say we hire 50 or 75 new financial planners at the costs that a new hire would bring, that is totally absorbable in the context of our P&L.

Staff remuneration. Just to be clear, that the new front office scheme was cost neutral, so the implementation of that was not designed to save or make money. That is cost neutral. The RGU scheme, which we are very excited about, is incremental to the cost base but obviously very aligned with growth. If we achieve that organic growth, you are all going to give us a much higher PE, and everyone will be happy.

On the culture, I would say staff morale, the integration, it is very easy. I am a reformed investment banker. We used to advise people on deals. It was gloriously simple because we could advise on the deal, sign a contract and then move on with our life. This integration, of course, has been a colossal effort, a massive effort over a couple of years, and there are really three phases to that integration.

You have the migration of client assets, which happened just before I arrived. I swanned in and all the hard work was done. You have the integration piece, again, largely before I arrived, which is sad and it is stressful because it means saying goodbye to valued colleagues. Then you have the harmonisation, is the third part. If you have two AML process, for example, you would tend to move to the higher common denominator. All of that is a huge amount of work.

When the Chairman and I and others thank our colleagues for the amount of work that is gone into this, we really mean it.

To your question on morale, it became a real grind by the end of last year. And people really needed their Christmas break. I am pleased to report people have come back refreshed and energetic, and we are now going at it again. That is reflected in the attrition. The attrition in the front office is about 2.8%, something like that for the business as a whole, 6.5%. So the attrition even through that period has been good, which is a testament to my predecessor, Paul Stockton's leadership skills and the culture that we have at Rathbones.

Stuart Duncan (Peel Hunt): Can I take you back to your happy slide, Jon, and just some of the opportunity of the younger cohorts? How much of a focus is that for you as a business? Is there anything you sort of specifically need to do as an organisation to attract more of these younger customers? Just the one question, boringly. Yes.

Jonathan Sorrell: Yes. It is a really important point. The younger cohort is really important. The value in our business model is in this longevity of the client relationship, 25, 30 years, should be longer. I mentioned in the presentation that rather than looking at minimum account sizes, we want to look at the present value of the client relationship that we can bring in, which is all to say, I would much rather have 10,000 new 30-year-old high-earning potential clients this year than £2 billion of net flows in the abstract, right?

So getting to the younger cohorts of clients is really important. That is another reason why that cubs initiative is really very important because they can go out and relate perhaps a little bit more easily than some people to that generation of clients. It is not just about that outreach from Jayne's business development team or from people within the IM and financial planning community. It is about the digital marketing piece as well.

With the new branding that we have, that has also fundamentally altered the accessibility and the appeal of our brand to a much broader demographic. That is all to play for and a really exciting feature. I think about those three million people and the fact Simonetta knows where they all are, and that is very exciting.

Ben Bathurst: Two questions this time. Firstly, on market segmentation. You referenced you are operating in targeted segments now, private office, charities to name a couple. I think it is right in saying that you pointed to the opportunity in the mass market. Does that mean that there is a requirement for you to broaden your appeal outside of those areas of strength? Or are you thinking of focusing more on getting more out of those targeted segments as described?

Then secondly, on AI. How prescriptive do you intend to be in terms of investment manager usage of AI? Is there going to be an edict from the centre? And do you intend to monitor this usage to improve productivity?

Jonathan Sorrell: Yes. Sorry if I was not clear on this market segmentation point. The point I was making was that when you look at the segments that we target, private office, charities, intermediaries, ethical investments and so forth, the right to win that I described really matters in those segments. It is not a mass market proposition. That was the point I was making. Just to be clear, we are not looking to go into the mass market.

Just to be really clear on that. I am sorry if I was not, as I spoke. The point you made was not the one I was trying to make.

On AI usage and edict, I do not think edicts work in a business like this, frankly, number one. Number two, I do not think you need an edict. This is something that should stand to reason. What you are trying to do in many parts of the business is create capabilities that people feel genuinely compelled to use.

Look, we have all gone through our own cycle of learning how to use AI tools, and I use them much more than I did 12 months ago and six months before that. I think people are on that journey. Certainly, with the introduction of Copilot and one or two other things that we are using on the financial planning side as well, people are really seeing huge benefits from that.

As we all know, the quality of what these things are able to do now is materially better than it was even six months ago. That is certainly my own personal experience of it. No edict, but it just stands to reason.

Ben Bathurst: What about on the monitoring side?

Jonathan Sorrell: My edict to you is use a microphone.

Ben Bathurst: Thank you. You just told me you did not believe in edicts.

Jonathan Sorrell: For you, it is fine.

Ben Bathurst: Yes. Will you be monitoring, if not edicting? Monitoring usage of AI. Would you be monitoring it if you are not edicting it?

Jonathan Sorrell: Well, there is a measure which is really important, of the number of hours that we think AI is saving. That is something that we are monitoring. It is basically something that comes automatically to us through the platforms that we use. It is not something that we need to gather ourselves, but beyond that, no.

Michael Sanderson (Barclays): I will go with the two because that is become fashionable, it would appear now. The first one is there is obviously been a couple of ownership changes or prospective ownership changes of what would be perceived as peers of yours. I suppose I am interested how you think about that in this moment of growth and the opportunities, whether it is hiring, client targeting, etc., etc. So interested how you are approaching that element.

Second piece, I totally understand and think the advice piece is very interesting. I am just interested about the higher penetrating offices that you mentioned. Is there anything particular about those offices, whether it is the nature of the clients, relative age, relative wealth that has meant it particularly powerful that may not be so relevant in some of the other offices for any reason?

Jonathan Sorrell: Yes. Look, on the first point, we are in an industry that has 42 private equity-backed players of some description. So naturally that space will consolidate over time. There are going to be more sellers than buyers I would have thought, over time. That, as I mentioned earlier, one day could be a really good opportunity for us.

In the context of the two or three deals that might have happened more recently, that may throw up some opportunities for clients who are not necessarily fans of the situation or certain people. As you would expect, we are pretty focused on those opportunities.

With respect to higher penetration, it is a fantastic question because it took us a little while to figure out what the answer was. It is actually really simple, which is in Manchester and Newcastle, what they have just done a fabulous job with is just working together from the start. It is just embedded in the way they go about their business, the way they think. I have mentioned it as a reflex. It is just the obvious thing to do.

Now one thing we have done with the new incentive scheme is cleared up the debate that used to exist about how economics might be split between the two functions. I am not sure that was the sole problem, but if economics ever got in the way, that is being cleared up once and for all through the implementation of the new scheme. So I think that helps.

Also you just get anecdotal evidence. There was a very good one from a few months ago. I think it was Camilla, where we had actually lost a pitch for a piece of business and we have just gone in with an investment management proposition. I think Camilla probably raised an eyebrow and said how about the whole financial planning thing. We went back and we won, and it was a £5 million piece of business.

Those moments, you have pennies dropping, but it is a matter of developing that reflex. And if we get that reflex in the organisation, that is a big opportunity. Does that answer your question?

Any more online?

Shelly Patel: Yes, I have got one online for you. Question from Paul Bryant from Equity Development. Jonathan, I understand the banking services you provide clients. But in your review of the business over the last few months, have you thought about whether you need to keep your banking license in-house?

Jonathan Sorrell: Yes. A bit of an old chestnut, this one, as I understand it. I am not the first person to raise this question. Look, when you look at the return on capital that we get through our banking license, it is in line with our requirements. Then importantly, it is obviously a great glue in the client relationships. It is not hugely widespread in its use around the business, but it is really useful glue in the relationship.

Third, I would just add that we are one to relinquish the banking license that comes with quite heavy operational requirements on the client money side as well. All to say that it has been a focus. I believe it has been something that’s come up for debate many times over the years, but we are comfortable with where we are right now. There may indeed be, on the margin, some opportunities to deploy some more balance sheet to our clients but just on the margins. That is it.

Thank you very much for coming in today, as I say, heroically on this Friday. Please do stay around and have a coffee with some of my colleagues. I would not get too close. We have got quite a nasty bug circulating since the middle of January, so keep the distance. Maybe open a window. Thank you very much to everyone. Thank you.