REPORT & ACCOUNTS 2023

DRIVEN BY PURPOSE

DELIVERED BY PEOPLE

We are driven by our purpose,

to think, act and invest for everyone’s

tomorrow. We deliver for and with

people: our clients, our colleagues and

partners. We listen, engage and adapt

to our stakeholders’ changing needs,

reinforcing our commitment to delivering

enduring sustainable value for the

benefit of everyone’s future.

On 21 September 2023, following regulatory approval,

Rathbones Group Plc completed its planned combination

with Investec Wealth & Investment UK (IW&I). Throughout

this report figures stated include IW&I, unless otherwise

indicated. Where practicable, a 2022 like-for-like

comparative has been included.

DRIVEN BY PURPOSE

DELIVERED BY PEOPLE

Find out more about how we are

delivering to our clients.

WE THINK CREATIVELY

Through MyRathbones

we respond to our clients’

needs. We update the app

regularly in response to

client feedback.

Read more: See page 7

CONTENTS

STRATEGIC REPORT

2 What we do and where we do it

8 Investment case

Chair’s statement

Group chief executive officer’s review

Understanding the external environment

Our purpose driven approach

Our culture and values

Our business model

Our strategic priorities

Our key performance indicators

Group chief financial officer’s review

Financial performance

Segmental review

Financial position

Liquidity and cash flow

Section 172 statement

Creating sustainable value for

ourstakeholders

Responsible business review

Task force on climate-related financial

disclosures summary

Non-financial and sustainability

information statement

Risk management and control

Principal risks

Viability statement

GOVERNANCE REPORT

Chair’s governance letter

Corporate governance report

Nomination committee report

102

Audit committee report

107

Group risk committee report

110

Remuneration committee report

124

Annual report on remuneration

136

Directors’ report

139

Statement of directors’ responsibilities

140

FINANCIAL STATEMENTS

141

Independent auditor’s report to the

members of Rathbones Group Plc

151

Consolidated financial statements

155

Notes to the consolidated

financialstatements

213

Company financial statements

216

Notes to the company financial statements

233

FURTHER INFORMATION

234

Five-year record

234

Corporate information

Our reporting suite

This report and accounts forms part

of our wider reporting suite where

you can ﬁnd more about our

full activities

Responsible

business

update 2023

Task force on

climate-related

ﬁnancial

disclosures

report 2023

Responsible

investment

report 2023

Gender pay gap

report 2023

FURTHER INFORMATION LINKS

Throughout this report we use these icons

to indicate where you can find out more.

Visit website

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01RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

Jersey

Guernsey

Rathbones offices

Investec Wealth &

Investment (IW&I)

offices

Both

WHAT WE DO AND

WHERE WE DO IT

INVESTMENT MANAGEMENT

Clients of this discretionary service can expect

atailored investment strategy that meets

individual objectives backed by an investment

process that aims to provide risk-adjusted

returns to meet clients’ needs today and in

thefuture.

OUR SPECIALIST CAPABILITIES

— Charities and not-for-profit organisations

— Our specialist ethical arm, Greenbank

— Personal Injury and Court of Protection

— Rathbones Investment Management

International.

OUR SERVICES

Bespoke service

Provides clients access to a dedicated investment

manager who will construct and manage a

bespoke portfolio that is specifically tailored

totheir needs.

Managed service

Provides clients with access to a dedicated

investment manager who will invest in a

rangeofready-made, diversified multi-asset

portfolios managed by Rathbones Asset

Management (RAM). IW&I also offer a

managedportfolio service.

Select

Provides clients direct access to a range of

ready-made, diversified multi-asset portfolios

managed by Rathbones Asset Management

(RAM). Select does not come with a dedicated

investment manager; it is a more appropriate and

cost-effective solution for smaller value portfolios.

ASSET MANAGEMENT

Rathbones Asset Management is a UK fund

manager, offering actively managed equity, fixed

income and multi-asset capabilities for retail-

and institutional-type investors. Our range of

single-strategy and multi-asset funds are

designed to potentially meet investors’ core

investment needs, or provide ‘building blocks’

for wealth solutions, with distribution primarily

through UK advisers.

International clients may also access our funds

through the Rathbone Luxembourg Funds SICAV,

which allows access to a similar range of actively

managed funds.

WHERE WE DO IT

With offices throughout the UK and the

ChannelIslnel Islands

, clients are never far away

fromhigh-quality, personalised wealth

management services.

locations in the UK and Channel Islands

3,500+

employees

£105.3bn

managed by us for our clients

FTSE 250

company listed on the London Stock Exchange

1. Includes Vision Independent Financial Planning

FINANCIAL PLANNING AND ADVICE

We provide financial planning and advisory

services through Rathbones Financial Planning,

IW&I, Saunderson House Limited and Vision

Independent Financial Planning. We also offer

UK trust, tax and legal services through the

Rathbones Trust Company.

Clients can choose a financial planning service

as a standalone offering or combine it with one

of our investment management services.

THREE LEVELS OF ADVICE

We can deliver our financial planning services

toclients in one of three ways:

— One-off advice

— Initial advice and planning

— Ongoing advice and planning.

COMPLEMENTARY SERVICES

As a licensed deposit taker we are able to offer

our clients a range of banking services including

currency and payment services, fixed interest

term deposits and loans to existing clients.

Through IW&I, we also offer SIPP administration

services to clients.

WEALTH MANAGEMENT

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02RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

HIGHLIGHTS OF 2023

FINANCIAL HIGHLIGHTS STRATEGIC HIGHLIGHTS STAKEHOLDER HIGHLIGHTS

PROFIT BEFORE TAX UNDERLYING PROFIT

BEFORE TAX*

£57.6 m £127.1m

2022: £64.1m 2022: £97.1m

BASIC EARNINGS PER SHARE UNDERLYING EARNINGS

PER SHARE*

52.6p 135.8p

2022: 83.6p 2022: 130.8p

RETURN ON CAPITAL

EMPLOYED (ROCE)*

UNDERLYING RETURN ON

CAPITAL EMPLOYED (ROCE)*

4.9% 12.1%

2022: 7.7% 2022: 11.8

DIVIDEND PAID AND

PROPOSED PER SHARE

* This measure is considered an

alternative performance measure

(APM). Please refer to page 34 for

more detail on APMs

1. A reconciliation between

underlying profit before tax and

profit before tax is shown on page

2. Underlying profit after tax as a

percentage of underlying quarterly

average equity at each quarter end

3. This highlight excludes IW&I

4. Includes clients who have left

within the financial year, outflows

from existing or remaining clients

are not included in this calculation

87p

2022: 84p

For a full ﬁve-year record

See page 234

NUMBER OF INVESTMENT

MANAGERS

NUMBER OF FINANCIAL

PLANNERS

681 117

2022: 355 2022: 74

TOTAL FUNDS UNDER

MANAGEMENT AND

ADMINISTRATION

£105.3bn

2022: £60.2bn

CLIENT RETENTION

3,4

EMPLOYEE SHARE

OWNERSHIP

92.7% 6.3%

2022: 93.7% 2022: 9.6%

STEWARDSHIP

ENGAGEMENTS WITH

COMPANIES

752

2022: 671

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03RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

We are committed to thinking, acting

and investing for everyone’s tomorrow.

We focus on long-term sustainable outcomes,

which enable us to build enduring value for our

clients, make a wider contribution to society

and create a lasting legacy. We are committed

to operating in a way that actively addresses

adverse impacts our activities have on society,

people and the environment.

This means understanding the issues that

matter to our stakeholders and evolving the

way we do business to meet their changing

needs and expectations.

DRIVEN BY

PURPOSE

DELIVERED

BY PEOPLE

Read more: See page 23

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05RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

WE ACT

COLLABORATIVELY

OUR COMBINATION WITH IW&I

Between November 2023 and January 2024, the Rathbones

and IW&I proposition teams participated in a roadshow,

bringing teams across the group together. In total 14 sessions

were run and well received.

The roadshow introduced the breadth of the Rathbones’

proposition (across financial planning, investment

management, asset management, and the strategic

partnership with Investec Bank Plc), the detail of Select,

Managed and Bespoke, and our plans for proposition

integration and development.

Following the roadshows, we surveyed attendees and

received 105 responses. The feedback informs the

prioritisation of topics to present inthe awareness programme

such as Investment research process, Rathbones’ suitability

process, investment risk monitoring and introduction to

Greenbank. The roadshows allowed the proposition team

early visibility of the future combined proposition

andsolicitfeedback on topics such as the direction of

travelfor target markets on our flagship offering Bespoke

discretionary management.

We received feedback such as:

As a new joiner on

14 August, it is good

to have had the

opportunity to meet

colleagues from both

firms already”

Birmingham Office

It is really helpful to gain

a better understanding

of what the future looks

like, it gets our buy in at

an early stage. It allows

us to speak with our

clients about it too as

they are interested”

Edinburgh Office

It was reassuring to have

the team come over and

talk us through the plans

and much appreciated”

Belfast Office

Keep the information

coming, appreciate

these meetings being

done in person”

Guildford Office

Read more: See page 23

LAUNCHING A NEW

SUSTAINABILITY FUND

Bryn Jones, Fund Manager

Rathbones Asset Management

Rathbone Greenbank Global Sustainable Bond Fund

Q: Why was the new fund created?

A: The Rathbone Greenbank Global Sustainable Bond Fund

was established in response to client demand for a diversified,

sustainable global bond offering that complements existing

fixed income strategies. Clients sought investment opportunities

that backed sustainable projects and businesses, contributing

to a better future.

Q: What does it oer our clients?

A: This fund is aimed at investors who want flexible global

bond exposure with strong sustainability policies. The

globalfixed income market is huge, and the fund’s flexibility

means it can go anywhere across this broad market, to

identify the best investments for building a well-diversified

portfolio of sustainability screened global corporate and

government bonds.

Q: What are the aims of the fund?

A: Our objective is to deliver a greater total return, after fees,

than a benchmark we have created to represent the global

fixed income market over any rolling five-year period. At the

same time, we avoid investing in activities that we believe

make the planet or its inhabitants worse off.

Q: Why is it dierent to our other oerings?

A: Distinct from our other offerings, the fund enjoys the

backing of Greenbank, a team with a track record in ethical,

sustainable and impact investing. As the fund’s manager,

Ibring nearly 20 years of experience from leading the

Rathbone Ethical Bond Fund. All securities, including

government bonds, are subject to Greenbank’s screening

process, providing a safeguard against greenwashing and

enhancing what we believe to be the fund’s unique appeal.

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07RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

INVESTMENT CASE

A GROWING BUSINESS WITH REWARDING CHARACTERISTICS FOR INVESTORS

Rathbones specialises in the UK wealth market which benefits from embedded structural growth, underpinned by strong long-term trends that support the demand for our services.

Following our combination with Investec Wealth & Investment UK (IW&I), we are well-positioned to provide attractive value for shareholders.

KEY DRIVERS FOR INDUSTRY GROWTH, CLIENT NEED AND LONGTERM OPPORTUNITY

There is an increasing need for

individuals to save and grow long-term

wealth as state pensions erode and life

expectancy increases.

There is a growing demand for financial

planning as regulatory changes

encourage individuals to take on the

responsibility of retirement planning.

There is significant intergenerational

wealth transfer to a new cohort of

potential clients that expect a

digitalpresence.

There is a rising interest in responsible

and thoughtful investing.

There are consolidation opportunities

ina fragmented market.

HOW WE ARE POSITIONED TO RESPOND AND SUCCEED

We provide our clients with a wide

range of unbundled wealth and asset

management propositions that can be

tailored to their individual needs and

complexity, delivered through our

highly trained investment managers

working directly with clients or

indirectly with third-party advisers.

We are investing in growing our financial

planning business both through targeted

acquisitions and ongoing marketing and

business development.

We are committed to our digital

investment programme that

complements our personalised

face-to-face client experience and

willbenefit the enlarged group.

We believe it is in the best interest of our

clients that the companies we invest in

adopt best practice in managing ESG

risks and we consider these when

making investment choices. For clients

who want 100% ethical and sustainable

investment management, we have a

dedicated team in Greenbank, and a

selection of ethical funds offered by

Rathbones Asset Management.

We have secured our future with the

combination of IW&I and can provide

clients with a trusted, long-standing

brand with increasing scale amid

industry change.

681

investment managers with long-term

investment performance

117

in-house financial planners, with access

to a further 138 in Vision Independent

Financial Planning

58%

of Rathbones’ clients using our digital

portal with plans for expansion across

the enlarged group

20+

years of ethical investment experience

43%

Rathbones’ client net promoter score

(NPS) against industry mean of 34%

1. Excludes a further 23 investment professionals in Rathbones Asset Management

2. Data excludes IW&I

OUR RESPONSE TO THIS DEMAND AND STRATEGIC DIRECTION WILL DELIVER VALUE FOR SHAREHOLDERS

A target underlying operating margin of

mid 20s% in 2024, and a medium-term

target (three+ years post IW&I

completion) of 30%+.

A stable revenue margin and robust

feeincome stream in addition to a

banking licence that provides

diversifiedincome streams.

Long-term client relationships which

provide annuity value on revenue.

A responsibly managed financial

position with a healthy capital surplus.

A progressive dividend policy with

adividend that has not been reduced

inmorethan 25 years.

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08RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CHAIR’S STATEMENT

STRONGER TOGETHER

Clive C R Bannister

Chair

DEAR SHAREHOLDER

Rathbones is a strong and secure business.

It is well-equipped to manage and navigate

challenging market conditions.

2023 was a difficult period for the UK economy:

global conflicts, rising interest rates and

continued inflation reduced economic growth

inmany parts of the world, directly impacting

the investment returns of our clients. These

collective challenges have highlighted the

importance of our adaptability, resilience and the

reassurance that we provide our stakeholders.

During 2023, we announced a transformational

combination with Investec Wealth & Investment

UK (IW&I). This transaction presents a

compelling strategic and financial rationale for

our shareholders, whilst it also better serves

ourclients, and secures our future as the UK’s

leading discretionary wealth manager.

We are delighted to welcome our IW&I

colleagues to our business. I look forward to the

year ahead as we work together, as one business,

to realise the significant proposition and

financial benefits for all our stakeholders.

CLIENTS

Our clients are at the heart of our strategy

andtheir interests are a key consideration in

everything that we do. In 2023, we continued

toprioritise engaging with clients through a

variety of methods including focus groups

andtargeted surveys, virtual and in-person

conferences and events as well as regular

communications updating them on the business,

macro themes, the IW&I transaction and our

investment propositions. We will continue this

dialogue during 2024.

SHAREHOLDER RETURNS

AND DIVIDENDS

Rathbones generates long-term value creation

forour shareholders. Following our combination

with IW&I, we commit again to our progressive

dividend policy. This has been in place for more

than 25 years, over which period we have never

reduced our dividend. Given the strength of our

enlarged business, we are pleased to be able to

sustain this dividend commitment, even in the

context of difficult markets.

At our half year results in July, we announced

aninterim dividend of 29p. We also brought

forward payment of a portion of the final 2023

dividend to shareholders on the register shortly

prior to the completion of the combination by

way of a second interim dividend of 34p, paid in

October. The final dividend in respect of FY23

has therefore been reduced accordingly to 24p

per share. This brings the total dividend for the

year, for shareholders on the register prior to the

combination, to 87p per share (2022: 84p) a 36%

increase on the prior year. The final dividend will

be paid on 14 May 2024, subject to shareholder

approval at our 2024 Annual General Meeting on

9 May 2024, for shareholders who are on the

RESPONSIBLE BUSINESS

Our responsible business programme enables

usto deliver on our purpose to think, act and

invest for everyone’s tomorrow. We seek to create

long-term value for our stakeholders, built upon

the foundations of strong governance.

Our programme ensures we deliver through

various initiatives, including our responsible

investment approach, diversity, equality and

inclusion (DE&I) efforts, community investment

and reducing the environmental impact of

ouroperations.

GOVERNANCE AND CULTURE

The board recognises that enduring business

success is not possible without a clear purpose,

and that good governance is about more than

just complying with rules. It is about culture,

behaviours and how we treat our clients. The

board is committed to ensure that the firm’s

purpose, values and culture are embedded

throughout the firm. The board regularly reviews

its ‘culture dashboard’ and, this year, we paid

particular attention to the impact on the

organisation from the combination with IW&I.

Itremains incredibly important to ensure that

the businesses are culturally aligned with client

focus at our core.

More information on the how the board

monitored and assessed culture can be found

inthe full corporate governance report.

FIVEYEAR DIVIDEND GROWTH

2023: 87p

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09RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FIND OUT MORE ABOUT OUR

STAKEHOLDER ACTIVITIES

DELIVERING FOR OUR CLIENTS

The group’s clients are at the heart of

ourstrategy and their interests are a key

consideration in everything that we do.

Read more: See page 49

COLLEAGUES

There are tremendous skills across our enlarged

group of 3500 colleagues. In 2023, our

management teams and the board continued to

engage through employee engagement surveys

and the board’s own workforce engagement

programme. We remain committed to improving

our colleagues’ experience at work, which is even

more important during the period of integration

with IW&I.

BOARD COMPOSITION AND SUCCESSION

Because of our combination with IW&I, there

hasbeen necessary and welcome changes to

ourboard. Most notably, Henrietta Baldock and

Ruth Leas are now new shareholder directors,

nominated by Investec Group. These

appointments were approved by our nomination

committee in September 2023, reflecting the

299% voting rights shareholding owned by

Investec Group Plc. Both have extensive

knowledge of the financial services sector and

Ilook forward to working with them in the

yearsahead.

Succession planning is vital to ensure the board

has the necessary plans in place for orderly

succession to both the board and senior

management positions. The board believes that

greater diversity drives better decision-making

and that building a diverse and inclusive

workforce will lead to better outcomes for

clients,colleagues and for our business.

Theboard has aligned its diversity policy for

board appointments with new targets set out

inthe listing rules and is proud to have met

thosetargets.

At the end of 2023, our board had five female

directors out of nine, which means we exceed

the commitment of female board representation

for FTSE 350 companies set by the FTSE Women

Leaders initiative.

We continue to meet the requirements of the

Parker Review as we have at least one director

from an ethnic minority background. We see

thisas a good foundation on which to build,

butcertainly not an end point.

After six years, Sarah Gentleman stepped down

as chair of the remuneration committee in

September 2023, to focus on her role as our

senior independent director. I would like to

thank her for her leadership on remuneration

policy over this time and am delighted that

Dharmash Mistry accepted the role as our new

remuneration committee chair.

In addition, in September 2023 we announced

that after four and half years as group CFO and

executive director, Jennifer Mathias would step

down from the Board on 31 December 2023 and

transition into the new position of group chief of

staff, working with the executive team across all

parts of the combined business. From January

2024, Iain Hooley took on the group CFO role as

Jennifer’s successor. Iain was finance director of

IW&I for more than a decade and was appointed

CEO of IW&I in February 2023, where he played

a key role in the success of the business. I am

grateful to both Jennifer and Iain and look

forward to working with them as we bring our

two businesses together.

ENGAGING WITH SHAREHOLDERS

We strongly believe in meaningful engagement

with shareholders, and I was pleased to meet

many of you this year. We are grateful for the

overwhelming shareholder support for the

combination with IW&I, which was an

affirmation of this transformational transaction.

CHAIR’S STATEMENT CONTINUED

The chair of the remuneration committee

consulted with our top shareholders on proposed

changes to our remuneration policy. The

consultation exercise demonstrated that there

isstrong support for changes that will be put to

shareholders at our AGM in May 2024.

LOOKING AHEAD

IW&I integration planning remains on track.

Weremain confident that the enlarged group

will deliver efficiencies and benefits to clients,

employees and shareholders. We will continue to

update you on our progress as we grow together

as a combined business.

Finally, on behalf of the board, I would like to

thank our clients, shareholders and colleagues

– old and new – for your enduring commitment

and collaboration. This remains the foundation

of our shared success. Thank you for being the

driving force behind our accomplishments in

spite of the turbulent economic landscape. It has

been through your collective efforts, resilience,

and hard work that we have been able to navigate

these challenges and I am confident we will

emerge stronger than ever.

Clive C R Bannister

Chair

5 March 2024

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10RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP CHIEF EXECUTIVE OFFICER’S REVIEW

A TRANSFORMATIONAL

YEAR

Paul Stockton

Group Chief Executive Officer

2023 IN REVIEW

In a year that continued to offer some

challenging market conditions, our 2023 results

reflect a resilience and a willingness to step

forward and address the structural challenges

that the UK wealth management industry faces.

Our priority has always been to provide the

reassurance and support that our clients expect

over such periods. We also continue to look to

create opportunities for future growth and

shareholder benefits, whilst managing

expenditure carefully.

The combination with Investec Wealth &

Investment UK (IW&I), announced in April

2023,holds the prospect of being truly

transformational. The integration programme is

progressing well, and having spent considerable

time with many new colleagues this year, I am

confident that we have brought together a group

of like-minded individuals who are excited about

the opportunities that the combination provides

our enlarged group.

We remain committed to delivering the planned

synergies from scale, whilst providing stability

toclients and colleagues over what will be a

verybusy 2024. I also look forward to building

enhanced propositions and services that

willbenefit our clients and deliver value

toshareholders.

INVESTMENT MARKETS AND GROWTH

There appeared little relief from a general

investment market malaise in the early part of

2023, particularly for those with a defensive

positioning and UK bias. This affected

investment performance across the group,

whichremained somewhat subdued until the

final quarter of the year, when both bonds and

equities rallied.

High inflation in the year not only increased

operating expenditure, but also added cost

ofliving pressures on some clients. Investor

sentiment moved away from equities towards

cash, and a client preference to use invested

capital to repay increasingly expensive debt

emerged. Despite this backdrop, gross inflows

(ex IW&I) of £69 billion (2022: £65 billion)

remained resilient, representing an annualised

growth rate of 114% of opening funds under

management and administration (FUMA) (an

increase from 95% in 2022), reaping the benefits

from ongoing client engagement and closer

relationships with key third-party distributors.

Gross outflows (ex IW&I) of £74 billion

(2022:£61 billion) were elevated, however,

representing 122% of opening FUMA (89% in

2022). Despite these outflows, client retention

remained high at 927% (2022: 937%).

IW&I was also impacted by similar trends,

though net outflows in the final quarter of the

year of £03 billion also reflected the impact of

known investment manager departures that

predominantly occurred prior to the

announcement of the combination with

Rathbones. Investment manager turnover

hasbeen low since then and engagement with

colleagues at IW&I continues to be very positive.

The UK fund industry suffered one of its

worstyears on record for net outflows in 2023.

Against this backdrop, Rathbones remained

resilient andranked in fifth position for total

netretail sales in the UK in 2023. (2022: eighth

position). Although Rathbones’ single strategy

funds posted net outflows of £06 billion for the

year (FY 2022: net outflows of £04 billion), our

Global Opportunities and Ethical Bond funds

were in the top quartiles relative to peer groups

for performance in the year. Our multi-asset

andFUMA managed via in-house funds (sold

directly, or as part of our Managed Portfolio or

Rathbones Select solutions) grew significantly,

with net inflows and transfers of £24 billion

(FY2022: £06 billion) for the year.

COMBINATION WITH IW&I

The combination with IW&I completed on

21September 2023, as planned. Collaboration

between the two businesses has been strong and

key decisions on the future structure, systems

and policies have been formulated ahead of plan.

This has enabled us to move quickly to establish

a robust framework for integration and begin

delivery of key actions and projects that will

bring both businesses together. There has been

strong enthusiasm amongst teams across both

businesses, who are working effectively to build

momentum and capture best practices.

In October, we announced the senior leadership

and governance structures for the combined

group, and the new executive team is working

well and interacting positively across the group.

Workstreams to effect common proposition

standards have advanced, and investment

research and investment risk teams are now

under common leadership.

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11RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

The enlarged Rathbones group has a strong

distribution capability working with an

extensive national network of third-party adviser

contacts and counterparties. This adds to our

successful existing relationship with Vision

Independent Financial Planning. In October,

wecreated the role of Chief Distribution

Officerto lead and build our distribution

capability across both the wealth and asset

management businesses.

Our distribution capability has also been

furtherenhanced by the combination and

strongpartnership we have formed with

InvestecBank. In December, we formed a

dedicated Strategic Partnership Team to work

with them more closely.

To December 2023, we realised £8 million

ofthe£15 million of run-rate synergies that

wereplanned for the first full year following

completion (by October 2024), against the

overall stated £60 million annualised synergies.

The impact on 2023 results was negligible given

the timing of when the combination completed.

There is much work to do but I remain confident

in our ability to deliver on these objectives.

In 2024, we expect to let all of our space in 8

Finsbury Circus in London to a high-quality

tenant for the remaining nine year lease term.

Our London-based teams will be located

together in 30 Gresham Street in the latter half

of2024. We continue to work to consolidate our

offices across the country, where we share

locations and to rebrand the IW&I offices we

nowhave in our portfolio.

Planning for the successful migration of clients

on to the Rathbones’ platform is well underway.

We continue to expect the client consent process

to be concluded during 2024, using a digital-first

and streamlined approach to minimise

disruption to clients and client facing teams.

Weplan to complete pilot exercises, ahead of

themain migration planned for early 2025.

A dedicated project team is already in place

andwill ensure that we are able to seamlessly

integrate IW&I, whilst maintaining business

asusual. Our combined resources bring an

extensive level of experience of consent and

migration processes, and we will continue

toapply these skills as we progress through

theyear.

A LEADING FINANCIAL

PLANNING CAPABILITY

The group, together with IW&I, Rathbones

Financial Planning (RFP) and Saunderson House

(SHL), operates a team comprising a total of 117

financial planners, delivering a range of leading

advice services. SHL and RFP have been under a

common leadership team for most of 2023, and

IW&I financial planning teams offer an excellent

opportunity to add further scale and strength.

The operational integration of SHL and RFP is

nearing completion, with a high proportion of

clients having agreed to receive or proceed with

advice to migrate to Rathbones’ investment

propositions. £24 billion of FUMA has already

migrated and we now expect to complete the

migration process during Q22024.

GROUP CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED

Our combination with IW&I was a significant step

in building a scale presence in the UK wealth

management market and presents many

opportunities as an enlarged business.”

FIND OUT MORE ABOUT OUR

STAKEHOLDER ACTIVITIES

OUR PURPOSE LED APPROACH

We are driven by our purpose to think,

actand invest for everyone’s tomorrow.

Read more: See page 58

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GROUP CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED

During the year, both SHL and RFP advisers

introduced more than 150 new clients to the

group, with expected new assets of more than

£200 million, demonstrating a distribution

reachdespite undertaking a time-consuming

migration process. The SHL migration will be

completed over the second quarter of 2024, and

thereafter will increase adviser capacity to grow.

Our next objective is to bring Rathbones and

IW&I financial planning businesses together,

such that all businesses can operate on one

platform to service both new clients and existing

investment clients across our regional offices.

Vision Independent Financial Planning (Vision)

remains an important part of our financial

advice proposition as an independent specialist

financial advice network. We will continue to

leverage its strong relationship with the enlarged

group. In 2023, FUMA in Vision was £33 billion

(2022: £26 billion) with 138 financial planners

(2022: 131). We anticipate further adviser

recruitment in 2024.

FOCUSING ON GROWTH

In addition to our strategic partnerships with

Vision and Investec Bank, Rathbones pursues

growth opportunities via three other key

channels: client-facing teams, third-party

advisers and direct marketing.

Firstly, our client facing investment and

planning teams represent a valuable network,

and we continue to look for ways to improve

capacity. Rathbones Select was designed as a

high-quality, ‘self-select’ (execution only)

investment service for clients with smaller

values to invest, providing a better value

proposition by operating through a dedicated

central team.

The service now has more than £2 billion of

funds under management (FUM), an uplift of

more than £14 billion since the beginning of

theyear, and client numbers are expected to

increase further in 2024 as we offer the service

to eligible clients of IW&I.

We also continue to build specialist teams to

serve target client groups, last year taking

advantage of the IW&I combination to establish

adedicated ultra-high-net-worth team to operate

across the enlarged business.

Secondly, the third-party adviser market

continues to be an important channel for us,

generating an annualised net growth rate of

50% in 2023 (2022: 48%). We now offer an

extensive range of investment solutions and

over340 IFA firms (2022: 280), are now

utilisingour Reliance on Adviser (ROA) model

(where responsibility for the suitability of the

investment mandate for the client rests with the

adviser, and Rathbones is instructed to manage

the client portfolio to a risk mandate). This

service clarification provides a clear pricing

model for clients and advisers and creates

internal efficiencies that make us easier to do

business with.

Together with IW&I, our offering to

intermediaries is comprehensive and

incorporates a full range of services, from

bespoke and managed Discretionary Fund

Management (DFM), through to our third-party

Managed Portfolio Services (MPS) and

Rathbones Select service, with ESG, tax and

offshore optionality, as well as our broad range

ofsingle strategy funds. This capability will be

central to what we can offer to third-party

advisers in 2024 and beyond.

Lastly, in 2023 we have taken some positive

steps to improve how we can build our digital

distribution capability. This has been supported

by the launch of a refreshed brand and

proposition suite that is much more digestible

and targeted on our key markets. Alongside

Rathbones, which has seen website referrals

increase by 100% year on year, we have

established Rathbones Asset Management

(RAM) and Greenbank as distinct identities.

IW&I has been incorporated into the group,

albeitthat full alignment will only occur

following migration in 2025.

EMBRACING TECHNOLOGY

Throughout the year we continued to develop

and deploy applications and technology that

improve the way in which we service our clients.

The number of clients using MyRathbones

continues to grow, reaching 58% in 2023 (2022:

50%). The visibility, access to messaging and

reporting that this application offers is an

important part of how we interact with clients.

In October 2023, we reported that the time

frameassociated with our client lifecycle

management (CLM) system development was

likely to move to deployment in the first quarter

of 2024. The system is now expected to go live

by the middle of 2024, using the period after

go-live and up to the migration of IW&I clients in

early 2025 to deploy further enhancements to

the solution and better align it with IW&I

requirements. This is later than we anticipated

but scope has been planned carefully to protect

the IW&I migration and also ensure that we take

best advantage of applications within IW&I that

we can benefit from.

The final phase of implementation of the Charles

River Investment Management solution into

Rathbones Asset Management will be completed

during the first half of 2024, adding the

functionality to improve investment processes

and the reporting capability that we are

confident will deliver operational efficiency.

While we continue to carefully manage scope,

aspreviously stated in our Q32023 results,

theexpected total costs of our digital project

increased from £40 million to £45 million,

with£307 million of this incurred up to

31December 2023.

INSPIRING OUR PEOPLE

We have prioritised this critical strategic

objective across the business as we progress our

post-combination integration work. Employee

engagement, by both the board and executive

teams, has been extensive, supported by town

halls and meetings across all office locations as

well as employee surveys. We remain committed

to a culture that fosters high performance and

builds rewarding careers for our colleagues.

Results from our engagement activity have

reaffirmed our expectations of the skills,

capabilities and cultural alignment within IW&I,

and has supported a collaborative approach to

working together that will bring out the very

bestfrom both businesses.

Employee wellbeing continues to be high on

ouragenda, and we have implemented various

measures to promote the mental and physical

health of our people. This year, we continued

tooffer access to our employee assistance

programme, including a free and confidential

phone and online advice service.

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GROUP CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED

Alongside these services, our wellbeing team

and inclusion networks have run awareness

sessions on several topics from cancer and

menopause awareness to mental health and

neurodiversity.

RESPONSIBLE INVESTMENT

We are proud of our long history of ethical

andsustainable investment, managed by

Greenbank, which continues to receive industry

recognition. This year, Greenbank won the ‘Best

Sustainable Investment Wealth Manager/DFM

Group’ at the Investment Week Sustainable

Investment Awards, as well as achieving ‘Silver’

for ESG company of the year at the 2023 Magic

Circle Awards.

In addition to Greenbank’s bespoke service,

RAMoffers investment strategies through the

Rathbone Greenbank Global Sustainability Fund,

Rathbone Ethical Bond Fund, Rathbone

Greenbank Multi-Asset Portfolios and, more

recently, through the launch of our new

Rathbone Greenbank Global Sustainable

BondFund.

Beyond our investment offerings, Rathbones

incorporates ESG considerations, and the

influence they can have on our clients’ portfolio

returns, into our investing decisions. By

integrating the analysis of ESG factors into our

investment processes, we aim to understand

ESGrisks and identify high-quality investments,

with attractive financial characteristics, that also

make a positive contribution to society. More

information on our approach to responsible

investment can be found in the responsible

business review of this annual report and our

standalone responsible business report, which

will be published in full next month.

RISK MANAGEMENT AND REGULATION

Risk management practices continue to be

embedded across the business as we remain

conscious of the impact of the changing risk

landscape to our firm and industry, particularly

in an uncertain economic climate. We are also

carefully assessing and mitigating the risks

associated with our planned change

programmes, including the IW&I integration.

We continue to respond appropriately to

regulatory changes and acknowledge recent FCA

and PRA consultation activity and statements.

The FCA’s Consumer Duty regime reinforces

behaviours and standards that we have

recognised for a long time, and we support the

principles that underpin the rules. Our ethos,

whole-of-market approach to investment,

flexible approach to financial planning, and

unbundled pricing are all well positioned.

TheUK market remains highly competitive

froma value perspective and this is reflected in

pricing levels generally, particularly in the

third-party advisers, charities and asset

management markets.

The Consumer Duty regime presented a good

opportunity to outline our propositions to the

market. As we streamline policies and practices

across the enlarged group, the pillars of

Consumer Duty will continue to be a focus for

uswell into 2024 and beyond.

OUTLOOK FOR 2024

Whilst we will continue to be impacted by

market reactions to political instability or

adverse geopolitical events, as a strong business

with increased scale, Rathbones is well-equipped

to manage and navigate these challenges. Recent

indicators that interest rates may fall in the

medium term should be positive for equity

markets and increase client confidence to invest.

This in turn should be positive for net organic

growth rates and the group as a whole.

The successful integration of IW&I is a priority

ofcourse, but this is alongside other important

objectives to develop our investment process,

further enhance our client engagement, embrace

technology and build out our distribution

capability. Rathbones remains well positioned to

take advantage of both the benefits of scale and

future growth opportunities, and I would like to

thank our people in our combined group for their

unwavering commitment, which continues to be

the driving force behind our success.

Paul Stockton

Group Chief Executive Officer

5 March 2024

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14RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

MEET THE GROUP

EXECUTIVE COMMITTEE

The group executive committee (GEC) is chaired

by Paul Stockton, Group Chief Executive Officer,

and he is supported by the senior management

team. The key role of the GEC is day-to-day

management of Rathbones. The committee

actively reviews and assesses business

performance supported by a range of

committees that operate across the group.

Full biographies of the group executive

committee are available on our website.

Read more on the

Group Executive Committee

Paul Stockton

Group Chief Executive Officer

Ivo Darnley

Managing Director,

RIM

Martin McGovern

Group Chief Client Officer

Rupert Baron

Chief Executive Officer

Investment Management

Murray Mackay

Managing Director,

IW&I

Sarah Owen-Jones

Group Chief Risk Officer

Iain Hooley

Group Chief Financial Officer

Gaynor Gillespie

Group Chief People Officer

Tony Overy

Chief Executive Officer,

SHL/RFP

Andy Brodie

Group Chief Operating Officer

Jennifer Mathias

Group Chief of Staff

Jayne Rogers

Group Chief Distribution Officer,

Executive Chair RAM

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15RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

UNDERSTANDING OUR STAKEHOLDERS

AND THE EXTERNAL ENVIRONMENT

UK AND GLOBAL ECONOMY

TREND

Rising inﬂation and interest rates have

moved investor sentiment away from

equities towards cash

The current macroeconomic environment,

both at home and abroad, is facing headwinds.

Persistent inflation has suppressed asset

values and presented cost of living pressures

for some clients, resulting in dampened

inflows. Rising interest rates elevated

outflowsas clients use portfolio assets to

repayincreasingly expensive debt.

RISING INTEREST RATES (UK)

4.5%

2022: 1.5%

ALIGNMENT WITH OUR PRINCIPAL RISKS

— Sustainability

— Regulatory and compliance

— Third-party suppliers

— Suitability.

HOW WE ARE RESPONDING

Reposition portfolios to withstand

market corrections, continue to engage

with our clients and oer relevant

propositions.

We continually monitor, manage and

reposition our portfolios. Our teams have

spent considerable time talking clients

through market movements and help them

plan for the future. We have also increased the

interest paid to clients and offered fixed-term

deposits during the year.

2. Bank of England (average interest rate in the year)

2024F

£2.1trn

SECTOR ASSETS ARE

ESTIMATED TO BE NEARING

£2.1 TRILLION BY 2024

2020

£1.6trn

1. Sources PAM Directory and Oliver Wyman estimates

THE OPPORTUNITY IN THE UK WEALTH SECTOR

The UK wealth sector is attractive and underpinned by strong long-term trends including an

increasing savings need as individuals live longer and an increasing need for financial advice

asindividuals are given more flexibility around financial decisions.

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UNDERSTANDING OUR STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT CONTINUED

DEMOGRAPHICS

TREND

Growing need for savings and

advice for retirement planning

Demographic trends continue to forecast

increased life expectancy and a general need

to save. Expectations for growth in investible

wealth continue, and this combines with the

ongoing demise of defined benefit pension

schemes alongside greater pension freedoms

that allow individuals more flexibility, and

drive a well-chronicled need for financial

advice.

% OF POPULATION AGED 45+

EXPECTED BY 2034

47%

2019: 44%

ALIGNMENT WITH OUR PRINCIPAL RISKS

— Sustainability

— Change

— People.

HOW WE ARE RESPONDING

Enhanced advice oering

We continue to develop our product and

service and advice offering. We work with

clients to support them at each stage of our

clients’ lifecycle, be it in their retirement

planning, discussions around inter-

generational wealth transfer or how to build a

foundation for their family.

3. ONS expectation of life in Great Britain

TECHNOLOGICAL INNOVATIONS

TREND

Technology enables multichannel

interactions with clients

Clients are becoming more and more

accustomed to using technology to

communicate and manage their financial

affairs. Keeping pace with this change is

fundamental to remaining competitive and

sustaining a quality service, particularly as

inter-generational wealth transfers accelerates.

UK INDIVIDUALS’ USAGE OF SMARTPHONES

TO ACCESS FINANCIAL SERVICES

55%

2020: 46%

ALIGNMENT WITH OUR PRINCIPAL RISKS

— Change

— Information security and cyber

— Regulatory compliance and legal

— People

— Third-party

— Sustainability.

HOW WE ARE RESPONDING

Develop our technology oering to

further support client engagement.

We are coming towards the end of a multi-year

plan to enhance our digital client experience,

to provide multi-channel communication to

clients. This includes upgrading client

relationship management tools and ensuring

we build relationships with the next

generation of clients using relevant technology

to facilitate retention of investment portfolios.

4. Yougov technology tracker

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UNDERSTANDING OUR STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT CONTINUED

RESPONSIBLE BUSINESS AND CLIMATE CHANGE

IMPACT ON OUR STAKEHOLDERS

Stakeholder ESG demands increasing

The role of the wealth management industry

in managing social and environmental issues

continues to increase.

Climate change is no longer a distant threat. It

has become a critical issue that is disrupting

the status quo across industries. The risks

associated with climate change, such as

physical risks from extreme weather events

and transition risks from shifting to a low-

carbon economy, are becoming material

considerations in investment strategies.

CLIENTS THAT IDENTIFY CLIMATE CHANGE

AS A KEY FINANCIAL CONCERN

c.17%

ALIGNMENT WITH OUR PRINCIPAL RISKS

— Sustainability

— Regulatory compliance and legal

— Suitability

— Information security and cyber

— People

— Third-party supplier.

HOW WE ARE RESPONDING

Broaden our ESG proposition

and investment range

Alongside our responsible business

programme, we continue to broaden our

existing ESG proposition and investment

range, ensuring they remain relevant for our

clients. It is also a priority of ours to maintain

dialogue with companies we invest in to

support and encourage more sustainable

long-term performance.

5. Rathbones (excl. IW&I) Financial Wellbeing Study, 2023. Based on surveys to more than 1,000 clients.

CONSOLIDATION OPPORTUNITIES

IMPACT ON OUR STAKEHOLDERS

Highly fragmented sector oers further

consolidation opportunities

The wealth management sector remains

highly fragmented, and benefits of scale

remain strong both in terms of operating

leverage and service diversification. There

remains a long tail of sub-scale wealth

managers who may have experienced greater

operational strain through the pandemic.

M&A ANNOUNCED OR COMPLETED IN

INVESTMENT MANAGEMENT AND

WEALTH MANAGEMENT IN H1 2023

324

H1 2022: 307

ALIGNMENT WITH OUR PRINCIPAL RISKS

— Sustainability

— People.

HOW WE ARE RESPONDING

Apply experience and discipline to market

scanning for further opportunities

We have a strong track record of M&A and

while we remain focussed on integrating our

combination with IW&I, inorganic growth

remains part of our wider strategy. We will

continue to selectively recruit experienced

professionals to the business.

6. 2024 investment management outlook. Deloitte Insights

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18RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR PURPOSE DRIVEN APPROACH

Clients

Our people

Shareholders

Our stakeholders

THIS IS DELIVERED

BY OUR PEOPLE

OUR CULTURE AND VALUES

The way we do business is shaped

by our culture and values.

Read more: See page 27

AND THE SUSTAINABLE

VALUE WE CREATE FOR

OUR STAKEHOLDERS

OUR S172 STATEMENT

Balancing the needs of our key

stakeholders is incorporated into

ourdecision-making processes.

Read more: See page 58

Society and communities

Partners and regulators

We are driven by

our purpose to

think, act and invest

for everyone’s

tomorrow

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

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19RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR CULTURE AND VALUES

Our purpose represents our commitment

as a business to all our stakeholders and

wider society. It underpins our strategy,

deﬁnes our culture and values and helps

to guide our business model. Our purpose –

thinking, acting and investing for everyone’s

tomorrow – determines what we do.

Our culture – which is shaped by our

interactions with our stakeholder groups –

determines how we do what we do.

OUR CULTURE FRAMEWORK

The board plays a critical role in setting the firm’s

strategy, purpose, business model and culture.

Each director recognises the role we have to

playin setting the ‘tone from the top’; and in

monitoring how the firm’s culture and values

are‘lived’. The board recognises the critical

importance that culture and values play in the

long-term success of the firm, and therefore the

role of the board in monitoring and assessing

culture. Our culture framework has been

developed to centre around our stakeholders and

align with our section 172 structure in order to

enable us to monitor how we are delivering on

our purpose and living our culture.

MONITORING CULTURE

The board spends time monitoring, and

satisfying itself as to the alignment of the group’s

purpose, values and strategy with its culture.

During the year, the board monitored, assessed

and promoted the group’s culture, including in

the following ways:

— annual review and discussion of the culture

dashboard, which includes setting out an

assessment of culture, and conduct metrics

across the firm focused on the key drivers

— feedback received from employees across the

group in regular employee opinion surveys

— updates on activities across the group in

relation to culture and values, including

employee training programmes

— consideration of culture, behaviour and

conduct issues by the remuneration

committee on assessing the employee

stockpurchase plan award to executives

— review of the group’s whistleblowing

arrangements

— regular direct engagement with employees

aspart of the board’s workforce engagement

programme, including office visits and

participation in town hall meetings

— encouraging and enabling eligible employees

to participate in schemes to promote share

ownership. Eligible employees are able to

participate in the group’s Save As You Earn

(SAYE) and Share Incentive Plan (SIP)

schemes, which provide cost-effective

opportunities for employees to acquire

sharesin the company.

The activities described above have allowed the

board to monitor the group’s culture effectively

during the year and to ensure that culture

continues to be aligned with the group’s purpose,

values and strategy. Further information can be

found in our corporate governance report on

page 88.

The importance of culture

THE HEARTBEAT OF THE ORGANISATION

A strong, positive organisational culture

underpins the value the organisation

creates. As the heartbeat of the organisation,

culture drives its success and impact. It’s the

invisible force and unwritten rules that

create a virtuous cycle that drives

engagement, satisfaction and commitment

and leads to improved organisational

performance and positive outcomes for

clients, shareholders and communities.

It reflects how supported and connected

each of us are with our colleagues and the

business we work in. Culture steers the

social norms and ways of working within

the organisation. It manifests day to day by

how we treat each other, work together and

the level of care we give and get back.

It’s the values we share, the behaviours and

norms that shape the way individuals and

groups interact within the workplace.

Culture is the thread that runs through

employee engagement, retention, team

collaboration, innovative and creative

thinking, decision-making, leadership,

morale, pride and belonging, attracting top

talent, adapting to change, wellbeing, client

satisfaction and our firm’s reputation. It’s the

heartbeat. And here at Rathbones, it’s strong.

OUR VALUES

RESPONSIBLE AND ENTREPRENEURIAL

IN CREATING VALUE

It’s through responsible entrepreneurship

that we achieve the best results for our

clients. Being responsible for today and

tomorrow, we are open to the new yet

always guided by the long view.

COURAGEOUS AND RESILIENT IN

LEADING CHANGE

Responsibility demands courage. We are

notafraid to ask difficult questions or

makechanges that need to be made.

Wehave the discipline and resilience to

seethings through.

COLLABORATIVE AND EMPATHETIC

IN DEALING WITH PEOPLE

Managing wealth responsibly takes

collaboration: with each client, among

colleagues and with professional partners.

Empathy brings insight. It’s our

responsibility to understand each

generation’s changing priorities.

PROFESSIONAL AND HIGH PERFORMING

IN ALL OUR ACTIONS

We take our professional responsibilities

seriously. Investment in our people and

thefabric of our firm renews our culture of

high performance. Never compromising on

quality because we have a responsibility to

be here tomorrow.

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20RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR BUSINESS MODEL

We are creating the UK’s leading

discretionary wealth manager.

Our combination with IW&I provides

clients with stability and continuity.

WHAT SETS US APART

We have a well established and trusted brand

where clients feel safe and supported by a business

with increasing scale in a fragmented market

We service financial needs for the long term

by offering product and service optionality

that grows and adapts with clients’ needs

We are able to offer our clients a range of

banking services as a licensed deposit taker and

the prospect of additional services through our

relationship with Investec Bank

We care about personal relationships with clients

and advisers and provide face-to-face contact, an

increasingly hard to find offering in the industry

We understand that because the world is

changing, our digital presence must complement

our face-to-face approach

Our colleagues stay with us for the long term.

They have strong financial expertise, supported

by an informed investment process and training

We care about the future and our purpose to

think, act and invest responsibly underpins our

strategy, defines our culture and values, and is

fundamental in our future business ambitions

Responsible investment report 2023

Our strategy: See page 22

OUR BUSINESS IS SIMPLE BUT OUR EXECUTION IS BASED ON EXPERTISE AND EXPERIENCE

WEALTH MANAGEMENT ASSET MANAGEMENT

Supporting clients through a

breadth of oerings to help

them manage their wealth

INVESTMENT

MANAGEMENT

FINANCIAL PLANNING

AND ADVICE

ASSET MANAGEMENT

(FUNDS)

Oering a range of products

and services that can be used

separately or together to suit

individual needs

DIRECTLY OR

INDIRECTLY VIA IFAS

USING INHOUSE

FINANCIAL PLANNERS OR

VISION’S INDEPENDENT

IFA

NETWORK

DISTRIBUTED PRIMARILY

THROUGH IFAS

Bespoke portfolio serviceswith a

dedicated investment manager

Managed fund solutions investing

in multi-asset portfolios with access

to a dedicated investment manager

A cost-effective solution

investing in multi-asset

portfolioswithout a dedicated

investment manager

One-off advice

Initial advice

and planning

Ongoing advice

and planning

Tax and trust services

Actively managed

single strategy funds

Actively managed

multi-asset funds

Creating sustainable value for

our clients and other

stakeholders

ESG considerations and the impact they have on clients’ portfolio returns

are incorporated into our investing decisions

Helping to generate stable,

recurring revenue streams

to enable a cash generative

business

Wealth and asset management fees represent the majority of our revenue base

Financial planning advisory fees continue to contribute to income

as we expand our adviser base and diversify income streams

Our banking license allows us to earn diversified income streams

Creating value for our stakeholders: See page 49

1. Independent Financial Adviser

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

21RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR STRATEGIC PRIORITIES

We launched our medium-term strategy for the

business in October 2019, to support our purpose of

thinking, acting and investing for everyone’s tomorrow.

Our four strategic priorities are set out here.

ENRICHING THE

CLIENT AND ADVISER

PROPOSITION AND

EXPERIENCE

Enhancing valued services

Deepening investment skills

SUPPORTING AND

DELIVERING GROWTH

Penetrating specialist markets

Driving organic growth

INSPIRING

OUR PEOPLE

Our culture and corporate values

OPERATING

MORE EFFICIENTLY

Driving productivity

Read more: See page 23 Read more: See page 24 Read more: See page 25 Read more: See page 26

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

22RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR STRATEGIC PRIORITIES CONTINUED

ENRICHING THE CLIENT AND ADVISER

PROPOSITION AND EXPERIENCE

2023 PROGRESS

— Continued to develop and deploy applications

and technology that improve the way in which

we service our clients, with the number of

clients using MyRathbones growing to 58%

in2023 (2022: 50%)

— Launched a refreshed brand and proposition

suite that is much more digestible and targeted

to our key markets

— Continued to grow our Reliance on Adviser

(ROA) proposition which provides a clear

pricing model for clients and advisers and

creates internal efficiencies that make us

easier to do business with

— Received customer experience accolades,

including a Gold rating from STAR (the best

practice initiative of improving customer

experience in transferring funds across

platforms) for RAM

— Launched the Rathbone Greenbank Global

Sustainable Bond Fund (see more on page 7)

— Hosted vulnerable client awareness sessions

for our colleagues throughout the year

— Increased our overall engagement with

clients(see more on page 52).

STRATEGIC FOCUS

Enhancing valued services − enhancing the

experience for private clients and providing a

dedicated service for financial advisers.

Deepening investment skills − developing our

investment expertise, broadening capability and

coverage, and incorporating ESG factors.

RELEVANT KPIs

— Number of investment management clients

— Net promoter score.

Read more: See page 27

RELEVANT PRINCIPAL RISKS

— Suitability

— Investment performance

— Sustainability

— Regulatory compliance and legal

— People

— Integration

— Information security and cyber.

Read more: See page 82

HIGHLIGHTS

OVERALL SATISFACTION SCORE ACCORDING

TO MOST RECENT CLIENT SURVEY

8.5/10

2022: 8.3/10

NUMBER OF IFA FIRMS USING RELIANCE

ON ADVISER

340

2022: 280

NUMBER OF INVESTMENT MANAGEMENT

CLIENTS FOR THE ENLARGED GROUP

114,200

2022: 67,700

PRIORITIES FOR 2024

— Complete the IW&I client consent process with

as little disruption as possible to the client and

adviser experience

— Build enhanced propositions and services that

will benefit clients and advisers

— Launch the client lifecycle management (CLM)

system by the middle of 2024

— Continue to respond appropriately to

regulatory changes, including Consumer Duty.

1. Data excludes IW&I

STRATEGIC

REPORT

FINANCIAL

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REPORT

FURTHER

INFORMATION

23RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR STRATEGIC PRIORITIES CONTINUED

SUPPORTING AND DELIVERING GROWTH

2023 PROGRESS

— Announced a transformative combination

with IW&I that provides scale and synergy

opportunities

— Grew gross discretionary and managed

inflows by 18% in the year

— Appointed a chief distribution officer

toleadand develop our distribution

capabilityacross both the wealth and asset

management businesses

— Improved capacity through the use of

Rathbones Select, designed as a high-quality,

‘self-select’ (execution only) investment

service for clients with smaller values to

invest, providing a better value proposition by

operating through a dedicated central team

— Continued to build specialist teams to serve

target client groups, including taking

advantage of the IW&I combination to

establish a dedicated ultra-high-net-worth

team to operate across the enlarged business

— Established a strategic partnership with

Investec Bank.

STRATEGIC FOCUS

Penetrating specialist markets − focusing on

specialisms, building on existing capabilities and

leveraging Greenbank.

Driving organic growth − managing client-facing

capacity, structuring distribution, driving growth

through financial planning, and building our

asset management business.

RELEVANT KPIs

— Total FUMA

— Investment management net organic

growthrates

— Underlying operating margin

— Dividend per share

— Underlying earnings per share

— Underlying return on capital employed.

Read more: See page 27

RELEVANT PRINCIPAL RISKS

— Sustainability

— Integration

— People

— Investment

— Performance.

Read more: See page 82

HIGHLIGHTS

NUMBER OF INVESTMENT MANAGERS

681

2022: 355

GROSS DISCRETIONARY AND

MANAGED INFLOWS

£5.1bn

2022: £4.3bn

RATHBONES SELECT FUM

£2.0bn

2022: £1.4bn

PRIORITIES FOR 2024

— Complete the migration of Saunderson House

clients onto Rathbones’ propositions

— Achieve year-one synergies in relation to the

combination with IW&I

— Continue to build relationships with third-

party adviser networks

— Enhance our distribution strategy through

thestrong associations we now have with

Investec Bank.

STRATEGIC

REPORT

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REPORT

FURTHER

INFORMATION

24RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR STRATEGIC PRIORITIES CONTINUED

INSPIRING OUR PEOPLE

2023 PROGRESS

— Established a new diversity, equality and

inclusion (DE&I) committee

— Ran another year of our non-executive

directorengagement programme, led by Iain

Cummings and Dharmash Mistry

— Delivered wellbeing events both in person and

on line, with sessions recorded and available

on our wellbeing hub

— After a short delay in Q4 we implemented SAP

Success Factors that will help improve the

efficiency of our processes

— Continued to encourage employee share

ownership through our SIP and SAYE schemes

— Gathered further feedback from colleagues

through our engagement surveys, which ran

throughout the year, with a 76% response rate

to our autumn survey.

Following the combination:

— IW&I participated in their first group-wide

colleague survey, across October – November;

leaders and managers are cascading and

sharing results in Q12024

— We worked on creating a strong fit with

Rathbones’ client-centric culture

— Our first joint town hall event was held with

colleagues from both Rathbones and IW&I

— More than 2000 colleagues attended joint

business function town halls since we

completed our combination, meeting

seniorleadership teams, hearing more

aboutthe integration and what to expect

STRATEGIC FOCUS

Our culture and corporate values − becoming

amore diverse and inclusive organisation,

continuing to listen to our people and

improvingour commitments to them.

RELEVANT KPIs

— Number of investment professionals

— Number of financial planners.

Read more: See page 27

RELEVANT PRINCIPAL RISKS

— People

— Change

— Integration

— Pension.

Read more: See page 82

HIGHLIGHTS

RATHBONES’ EMPLOYEE NET

PROMOTER SCORE

43%

2022: 39%

EMPLOYEE PARTICIPATION IN SIP

84%

2022: 90%

EMPLOYEE PARTICIPATION IN SAYE

56%

2022: 63%

— The group introduced joint MS Teams’

capability as a key collaboration and

connection tool to facilitate conversations,

group meetings and collaborate on work more

easily between IW&I and Rathbones

— We aligned our DE&I networks to support the

relaunch of our groups at the start of 2024

— Rathbones new senior leadership governance

structures were announced.

PRIORITIES FOR 2024

— Continued work to integrate our colleagues

— Launch new inclusion networks

— Offer share ownership across the wider group

— Culture review.

1. Data excludes IW&I

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

25RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR STRATEGIC PRIORITIES CONTINUED

OPERATING MORE EFFICIENTLY

2023 PROGRESS

— Appointed integration delivery teams to

workon the combination with IW&I

— Despite delays, we progressed our digital

transformation programme, working to

increase time available to investment

managers to focus on portfolio performance

and winning new clients

— Increased the number of clients using

MyRathbones to 58% in 2023 from 50%

in2022

— Embedded hybrid working, allowing greater

flexibility, better work life balance, focused

office time and anchor days for greater

teamcollaboration

— Implemented the Charles River Investment

Management Solution into RAM

STRATEGIC FOCUS

Driving productivity − providing a quality

clientexperience and making us easy to do

business with.

RELEVANT KPIs

— Underlying operating margin

— Underlying return on capital employed

— Common Equity Tier 1 ratio.

Read more: See page 27

RELEVANT PRINCIPAL RISKS

— Information security and cyber

— Technology

— People

— Change

— Third-party supplier.

Read more: See page 82

HIGHLIGHTS

% OF CLIENTS USING MYRATHBONES

58%

2022: 50%

SECURE MESSAGES SENT ON

MYRATHBONES

14,702

2022: 13,658

DOCUMENTS DOWNLOADED

DURING 2023

124,461

2022: 115,780

PRIORITIES FOR 2024

— Continue to develop and deploy applications

and technology that improve the way in

whichwe service our clients

— Outsource some of our technology provision

and cyber support to Investec Bank

— Complete the client consent process using

adigital-first approach, in preparation for

IW&Iclient and asset migration in 2025

— Deploy further enhancements to the

CharlesRiver system into our asset

management business

— Consolidate our offices across the country

where we share locations with IW&I and

rebrand the IW&I offices we now have in

ourportfolio.

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

26RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

KEY PERFORMANCE INDICATORS

(KPIs)

The group considers the following financial and

non-financial measures as key performance

indicators (KPIs) of its overall performance.

Each KPI is aligned with at least one of our four

strategic pillars and is used to measure both

the progress and success of our strategy

implementation. All KPIs presented below are

prepared on a reported basis. Following a review

of historically reported KPIs, we have removed

the following in order to align with what is

reported internally and to focus on metrics that

are more relevant to the business:

— Performance-related variable employee costs

— Percentage of shares held by current

employees

— Employee turnover; we continue to report

thisin our responsible business section on

page 58.

TOTAL FUNDS UNDER MANAGEMENT

AND ADMINISTRATION £bn

£105.3bn

Incremental uplift from IW&I

68.2

60.2

63.1 42.2 105.3

DEFINITION

Total FUMA at the end of the year.

STRATEGIC FOCUS

The amount of funds that we manage directly

impacts the level of income we receive.

COMMENTARY

This year, there has been a £422 billion uplift

due to inclusion of IW&I. Rathbones FUMA

excluding IW&I increased by 47% year-on-year

due to market and investment performance.

Alternative Performance Measure

Read more: on APMs, including a reconciliation to the

ﬁnancial statements (where possible), on page 34

Read more: Remuneration page 110

UNDERLYING

OPERATING MARGIN %

22.3%

27.7

21.3

22.3

DEFINITION

Underlying profit before tax as a percentage of

operating income.

STRATEGIC FOCUS

This measure enables the group’s longer-term

operational and segmental performance to be

understood as it is less affected by short-term

market volatility and non-recurring items than

the IFRS operating margin.

COMMENTARY

The inclusion of IW&I from October 2023

uplifted operating income, resulting in an

improved operating margin of 223%.

Operatingincome and underlying operating

expenses in Rathbones (excluding IW&I) grew

atthe same rate year-on-year, resulting in a

marginal reduction in the operating profit

margin to 211%.

UNDERLYING RETURN

ON CAPITAL EMPLOYED %

12.1%

16.1

11.8

12.1

DEFINITION

Underlying profit after tax as a percentage of the

underlying quarterly average total of equity.

STRATEGIC FOCUS

A useful measure of financial efficiency as it

indicates profitability after factoring in the

amount of capital employed by the business.

COMMENTARY

The underlying quarterly average total equity

increased by £2953 million in 2023 compared

to 2022, reflecting the share issue for the IW&I

combination at the end of the third quarter.

FINANCIAL

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

27RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP NET ORGANIC GROWTH

RATES IN FUNDS UNDER

MANAGEMENT %

(0.8)%

4.9

0.6

(0.8 )

DEFINITION

The value of annual net inflows as a percentage

of opening FUMA.

STRATEGIC FOCUS

Measures the ability of the business to grow in

the absence of acquisitions.

COMMENTARY

Gross inflows in our discretionary and

managedproposition were 186% higher

than2022, this increase in inflows has been

offset by net outflows in IW&I (reflecting the

impact of investment manager departures

thatpredominately occurred pre combination)

and single strategy funds (in line with

industrytrends).

KEY PERFORMANCE INDICATORS (KPIS) CONTINUED

UNDERLYING EARNINGS

PER SHARE p

135.8p

172.2

130.8

135.8

DEFINITION

Underlying profit after tax divided by the

weighted average number of ordinary shares.

STRATEGIC FOCUS

An important measure of performance as it

shows profitability, reflecting the effects of any

new share issuance.

COMMENTARY

The growth in the year is due to increased

underlying profit after tax , which has been

partially offset by the increased number of

shares in issue and the effect of the increased

rate of corporate tax. This KPI has been

calculated for the enlarged group.

FINANCIAL

COMMON EQUITY TIER 1 RATIO %

17.8%

18.7

17.9

17.8

DEFINITION

Common Equity Tier 1 (CET1) capital as a

proportion of total risk exposure amount.

STRATEGIC FOCUS

As a regulated entity, we must maintain certain

levels of capital. A higher CET1 ratio is an

indicator of financial strength. We seek to

maintain an efficient capital level.

COMMENTARY

The CET1 ratio has remained consistent with

prior year, as we increased the capital base

proportionately with the larger size of the group

resulting from the combination with IW&I.

DIVIDEND PER SHARE p

87p

DEFINITION

Total annual dividend for the year per share

(interim and final).

STRATEGIC FOCUS

Dividends represent an important part of the

returns to shareholders.

COMMENTARY

At our half year results in July 2023, we

announced an interim dividend of 29p. We

alsobrought forward payment of a portion of

thefinal 2023 dividend to shareholders on the

combination by way of a second interim

dividend of 34p, paid in October.

Alternative Performance Measure

Read more: on APMs, including a reconciliation to the

ﬁnancial statements (where possible), on page 34

Read more: Remuneration page 110

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

28RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

KEY PERFORMANCE INDICATORS (KPIS) CONTINUED

NUMBER OF INVESTMENT

MANAGEMENT CLIENTS

114,200

66,500

67,70 0

45,200

114,200

69,000

Incremental uplift from IW&I

DEFINITION

The number of investment management clients

who use our services.

STRATEGIC FOCUS

In an industry where scale is important, the

sizeof our client base helps to determine

marketshare.

COMMENTARY

The increase in client numbers shows growth

inthe business. The basis of this calculation is

dependent on the way client data is structured

on the relevant operating systems. It is therefore

not practicable to apply consistent

methodologies across the RIM and IW&I

businesses until the migration onto a single

system has been completed. We expect the

number to change following migration, but

consider the figure disclosed to be appropriate

inthe interim period.

NONFINANCIAL

NET PROMOTER SCORE %

43%

Mean

N/A

34 43

IW&I NPS

DEFINITION

The likelihood that a client will recommend

Rathbones. Collected through a survey where

clients score the business between -100%

and100%.

STRATEGIC FOCUS

Our net promoter score highlights client

satisfaction. We benchmark against our peers

and our score shows clients’ willingness to

recommend Rathbones as a business. This is a

new KPI that we have previously reported in the

strategic report.

COMMENTARY

The increase in score reflects an increase in

client satisfaction and likelihood to recommend

Rathbones. The mean is the average of the peer

group net promoter scores.

NUMBER OF INVESTMENT

MANAGERS

681

Incremental uplift from IW&I

341

355

379 302

681

DEFINITION

Includes individuals who are regulated to

provide discretionary investment management

services to clients.

STRATEGIC FOCUS

This reflects our capacity to efficiently service a

growing client base. This is a new KPI that we

have previously reported in the strategic report.

COMMENTARY

The increase in investment managers over the

year shows that we are able to attract new talent,

creating more capacity to service our clients.

This KPI excludes investment professionals in

our asset management business (2023: 23, 2022:

24, 2021: 21).

NUMBER OF FINANCIAL PLANNERS

117

Incremental uplift from IW&I

72 45

117

DEFINITION

Includes in-house planners within Rathbones

Financial Planning, Saunderson House Limited

and IW&I.

STRATEGIC FOCUS

This reflects our capacity to efficiently service a

growing client base. This is a new KPI that we

have previously reported in the strategic report.

COMMENTARY

The increase in financial planners over the year

shows that we are able to attract new talent,

creating more capacity to service our clients.

This KPI excludes external Vision financial

planners (2023: 138, 2022: 131, 2021: 131).

Alternative Performance Measure

Read more: on APMs, including a reconciliation to the

ﬁnancial statements (where possible), on page 34

Read more: Remuneration page 110

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

29RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP CHIEF FINANCIAL OFFICER’S REVIEW

COMMITTED

TO DELIVERING

SUSTAINABLE VALUE

Iain Hooley

Group Chief Financial Officer

I am delighted to present my first review since

my appointment as group chief financial

officeron 1 January 2024. Having been part of

Investec Wealth & Investment UK ( IW&I) for

over 23 years, I look forward to the exciting

TABLE 1. GROUP’S OVERALL PERFORMANCE

2023

£m

(unless stated)

IW&I

£m

(unless stated)

Rathbones

excl. IW&I

£m

(unless stated)

2022

£m

Operating income

571.1 87.9 483.2

4559

Underlying operating expenses

(444.0) (62.5) (381.5)

(3588)

Underlying profit before tax

127.1 25.4 101.7

971

Underlying operating margin

22.3% 28.9% 21.0%

213%

Profit before tax

57.6 15.0 42.6

641

Effective tax rate

34.9%

236%

Taxation

(20.1)

(151)

Profit after tax

37.5

490

Underlying earnings per share

135.8

1308p

Earnings per share

52.6

836p

Dividend per share

87.0 p

840p

Return on capital employed (ROCE)

4.9%

77%

Underlying return on capital employed

12.1%

118%

1. Reconciliation between the measure and its closest IFRS equivalent is shown in table 3

2. The total interim and final dividend proposed for the financial year

Operating income increased 253% to £5711

million (2022: £4559 million). Excluding

income relating to IW&I of £879 million,

operating income grew by 60% to £4832

million. This growth was driven predominantly

by increased interest revenues, reflecting rising

interest rates and the benefits of the group’s

banking activities. Consequently, net interest

income contributed £517 million to operating

income in 2023 (2022: £183 million).

While interest income increased significantly

during the year, recurring investment

management and asset management fees

(excluding IW&I fees of £701 million) also

reported growth, rising 23% to £3447 million

due to higher FUMA which benefited from an

improvement in average market indices.

Expenditure also increased, reflecting the

inflationary environment, increased headcount

and investment in our digital programme. The

increase in headcount reflects additional client

facing roles and related support in addition to

change and technology resource, including that

which is part of our preparation for delivering

the integration of IW&I. The FSCS levy reduced

by £46 million in 2023 as a result of one-off

factors and we expect the levy to revert to

normal levels in 2024.

Despite the increase in total expenditure

theunderlying operating margin, which is

calculatedas the ratio of underlying profit

beforetax to operating income, improved to

223% (2022: 213%).

opportunities that lie ahead for our combined

business, driven by the core values that the

Rathbones and IW&I businesses share, and the

significant benefits that we will bring to our

clients and shareholders from the scale,

enhanced propositions and depth of capability

that our combined business will offer.

The group has delivered continued progress in

itsfinancial performance despite challenging

market conditions throughout 2023. This has

been achieved alongside the successful delivery

of the IW&I and Rathbones combination during

September 2023. Delivering this transaction

represents a significant milestone not only for

Rathbones and IW&I but for the UK wealth

management industry. Weare now focused on

delivering the integration of the businesses and

realising the benefits of the combination.

Underlying profit before tax was £1271 million

(2022: £971 million), an increase of 309% in the

year, reflecting the contribution of IW&I to the

group’s performance in Q4 of an underlying

profit before tax of £254 million.

The Rathbones group excluding IW&I delivered

a47% increase in underlying profit before tax to

£1017 million. This result is after charging the

£144 million of planned expenditure on our digital

programme that we announced in February 2022.

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

30RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

The development of our client lifecycle

management system hascontinued during the

year and is now expected to go live mid-way

through 2024, albeit with the overall cost

expected to increase from £400 million to

£450million, as set out in our Q32023

statement. The Charles River Investment

Management Solution will be fully implemented

into Rathbones Asset Management in the first

half of2024, adding functionality that will

improve investment processes and reporting

capability, that we are confident will deliver

significant operational efficiency.

Statutory profit before tax for 2023 was £576

million (2022: £641 million). The 10% reduction

(2022: 32% reduction) is driven by increased

acquisition execution and integration costs, along

with higher amortisation charges following the

IW&I transaction. The majority of the integration

costs incurred during the year relate to IW&I but

also include the final amounts payable in relation

to the Saunderson House and Speirs & Jeffrey

acquisitions, which amount to £78 million for

theyear.

The board primarily considers underlying

measures of income, expenditure and earnings

when assessing the performance of the group.

These are considered to provide useful additional

information on business performance, rather

than reviewing results on a statutory basis only.

These measures are also widely used by research

analysts covering the group. A full reconciliation

between underlying results and the closest IFRS

equivalent is provided on page 34.

OUTLOOK AND GUIDANCE

The Group’s financial performance remains

closely linked to the behaviour of global

investment markets which, despite making

positive progress during the latter part of

2023,remain sensitive to the continued

heightened uncertainty in the economic

andgeopolitical environment.

We remain focused on our key strategic priorities

to successfully integrate the IW&I and Rathbones

Investment Management businesses, complete

the migration of Saunderson House client assets

to Rathbones investment solutions, and deliver

the successful launch of our new client lifecycle

management system. The IW&I integration

project is progressing well and while this project

is planned to continue into 2025, synergy

realisation for the combination remains on

trackand we continue to expect 25% of

synergies in the first full year following

completion as guided at the time of the

combination, which will benefit the group’s

profitability going forward from the point the

synergies are achieved. The one-off costs to

achieve the annualised synergies remain as

stated and will predominantly fall under

non-underlying costs over the next two years.

The operational integration of Saunderson House

and Rathbones Financial Planning is nearing

completion, with a high proportion of clients

having agreed to receive or proceed with advice

to migrate to Rathbones’ investment

propositions. £24 billion of FUMA has already

migrated and we now expect to complete the

migration process during Q22024. Assets once

migrated are expected to generate a total revenue

margin of c.1%. On a proforma basis, FUMA of

£4billion would generate annualised revenue

ofc.£40 million, split across advice, investment

management and asset management income.

As noted above and advised in the reporting of

our half year results, the costs to deliver the

client lifecycle management system increased

from £400 million to £450 million, with

£307million incurred up to 31 December 2023.

The costs of the implementation project continue

to be monitored closely.

The reduction in the rate of UK inflation is

welcome and we remain focused on ensuring

ahigh degree of discipline in managing our cost

GROUP CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

HIGHLIGHTS:

FINANCIAL PERFORMANCE

base to ensure we mitigate the effects of inflation

as far as possible. Employee costs in 2023

willreflect salary inflation of approximately

4%during the year plus the full impact of

recruitment activity in 2023. A lower rate of net

recruitment is expected for 2024 relative to 2023

outside of that directly related to the IW&I

integration project.

We have considered the implications for our

business of the FCA’s recent ‘Dear CEO’ letter to

platform and SIPP providers relating to interest

revenues. We consider that the FCA’s

requirement to cease the charging of fees in

respect of cash assets within a firm’s custody

which generate interest revenues is relevant to

the small element of our FUMA that is under an

execution-only mandate. We will therefore no

longer apply fees to the cash element of these

portfolios from 1 March 2024. We expect the

adverse impact on income to be small at

approximately £06 million per annum.

We previously guided to a high-20s underlying

operating margin for 2024, with 30%+ three

years post completion of the IW&I combination

(i.e. from September 2026). The scale and

benefits of the combined business and the

synergies that we have committed to, mean we

are well positioned to achieve our end state of

30%+ margin, albeit, the path will now be

mid-20% in 2024. The primary drivers of this

change are the continuing investment in our

digital programme and the time required to

complete the migration of Saunderson House

clients, in addition to the impact of ongoing

inflationary pressure.

The group maintains a robust financial position

and is well placed financially to support the

investment that is required to deliver on our

strategic priorities as we drive forward with our

plans during 2024.

1. This measure is considered an APM. Please refer

to page 34 for more details on APMs

FUMA OPERATING MARGIN

£105.3bn 10.1%

2022: £60.2bn 2022: 14.1%

UNDERLYING ROCE

UNDERLYING

OPERATING

MARGIN

12.1% 22.3%

2022: 11.8% 2022: 21.3%

EPS DIVIDEND

PER SHARE

52.6p 87p

2022: 83.6p 2022: 84p

UNDERLYING EPS CET1 RATIO

135.8p 17. 8 %

2022: 130.8p 2022: 17.9%

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

31RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

FINANCIAL PERFORMANCE

BUSINESS PERFORMANCE: FUNDS UNDER MANAGEMENT AND ADMINISTRATION

(FUMA)

Total group FUMA at 31 December 2023 was £1053 billion (2022: £602 billion). The increase during

the year is driven predominantly by the addition of £408 billion of IW&I FUMA from 30 September

2023, following the completion of the combination with IW&I during the year. Based on a pro forma

opening position of £1010 billion, FUMA has increased by 43% during the year from an opening

position of £1010 billion (Table 2) despite challenging market conditions that have placed adverse

pressure on net flows.

Rathbones discretionary and managed net inflows of £07 billion reflect gross inflows of £51 billion,

an increase of 186% relative to 2022, as the business continued to drive strong levels of new

business despite the difficult economic backdrop. In total, net flows relating to Rathbones

discretionary and managed FUMA represented an annual rate of growth of 15% (2022: 26%), with

the reduction relative to the prior year being the result of higher gross outflows offsetting the higher

level of gross inflows. In addition to net flows, discretionary and managed FUMA benefited from the

continued migration of Saunderson House client assets into Rathbones investment solutions.

Gross outflows were elevated throughout the year. Rathbones Investment Management outflows of

£38 billion (2022: £26 billion) reflected the effect of higher inflation and interest rates, as existing

clients prioritised reducing debt and meeting cost of living pressures. The increase in outflows is

therefore principally driven by partial withdrawals by existing clients and not client losses, but does

reflect the loss of two large charity mandates during the year. Direct net flows into our multi-asset

fund range, including that which is managed as part of Investment Management portfolios, remained

robust, reflecting the diversification and efficient offering these funds provide for smaller portfolios.

IW&I has contributed £08 billion of gross inflows during the final quarter of the year following

completion of the combination. These inflows were offset by elevated gross outflows, resulting in net

outflows for the period of £03 billion. The level of gross outflows reflects both the market backdrop,

consistent with the Rathbones discretionary and managed FUMA, along with expected outflows

relating to investment manager departures that predominantly occurred prior to the announcement

of the combination. Since then, investment manager turnover has been low, supported by positive

engagement as our integration work progresses.

The general backdrop for the asset management industry has been challenging during 2023, with

substantial withdrawals from UK funds being seen across the industry. Our single strategy funds

were not immune from this backdrop but showed relative resilience with net outflows of £05 billion

for the year (2022: £04 billion outflow), representing 85% of opening FUMA. Investment returns for

these funds were relatively strong during the year, resulting in total FUMA remaining relatively

consistent year-on-year at £67 billion (2022: £65 billion).

Table 2 presents separately the FUMA and associated movements in those services and products

which support our wealth management propositions. Wealth management FUMA incorporates

ourcore bespoke discretionary portfolio and managed portfolio services. It also includes direct

salesinto our range of risk-targeted multi-asset funds, which are designed to be used as wealth

management solutions for both our direct clients and those of investment platforms and financial

advisers. Asset management FUMA includes our focused range of specialist ‘single-strategy’ funds,

which are designed to act as individual holdings within investment portfolios.

TABLE 2. GROUP FUMA AND FLOWS BY SERVICE LEVEL ON PROFORMA BASIS

Year ended

31 December 2023

Opening

FUMA-

pro

forma

basis

£bn

Gross

inflows

£bn

Gross

outflows

£bn

Net

flows

£bn

Transfers

£bn

SHL

migrated

assets

£bn

Market &

investment

performance

£bn

Closing

FUMA

£bn

Net

growth

(flows)

Rathbones

Investment

Management 443 42 (38) 04 (02) 24 19 488 09%

Bespoke

portfolios 429 38 (35) 03 (09) 11 16 450 06%

Managed via

in-house funds 14 04 (03) 01 07 13 03 38 101%

Multi-asset funds 22 09 (06) 03 − − − 25 138%

Rathbones

discretionary

and managed

46.5 5.1 (4.4) 0.7 (0.2) 2.4 1.9 51.3 1.5%

Non-discretionary

service 07 01 (01) (00) (01) − 01 07 (29%)

IW&I 408 08 (11) (03) (01) − 19 423 (08%)

Saunderson

House 41 01 (05) (04) − (24) 03 16 (95%)

Total wealth

management

92.1 6.1 (6.1) (0.0) (0.4) – 4.2 95.9 (0.0%)

Single-strategy

funds 65 13 (18) (05) − − 07 67 (85%)

Execution only

and banking 24 03 (06) (03) 04 − 02 27 (104%)

Total group

101.0 7. 7 (8.5) (0.8) – – 5.1 105.3 (0.8%)

1. 2023 Group FUMA and flows by service level has been prepared on a proforma basis, opening FUMA has been uplifted by

£40.8 billion to include IW&I FUMA acquired with effect from 30 September

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

32RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

FINANCIAL PERFORMANCE CONTINUED

Year ended 31

December 2022

Opening

FUMA

£bn

Gross

inflows

£bn

Gross

outflows

£bn

Net

flows

£bn

Transfers

£bn

SHL

migrated

assets

£bn

Market &

investment

performance

£bn

Closing

FUMA

£bn

Net

growth

(flows)

Rathbones

Investment

Management 493 35 (26) 09 (02) − (57) 443 19%

Bespoke

portfolios 480 33 (25) 08 (03) − (56) 429 16%

Managed via

in-house funds 13 02 (01) 01 01 − (01) 14 103%

Multi-asset funds 20 08 (04) 04 − − (02) 22 200%

Rathbones

discretionary

and managed

51.3 4.3 (3.0) 1.3 (0.2) – (5.9) 46.5 2.6%

Non-discretionary

service 10 00 (01) (01) (01) − (01) 07 ( 74%)

Saunderson

House 49 03 (05) (02) (00) − (06) 41 (49%)

Total wealth

management

57. 2 4.6 (3.6) 1.0 (0.3) – (6.6) 51.3 (8.9%)

Single-strategy

funds 83 17 (21) (04) − − (14) 65 (45%)

Execution only

and banking 27 02 (04) (02) 03 − (04) 24 (90%)

Total group

68.2 6.5 (6.1) 0.4 – – (8.4) 60.2 0.6%

OPERATING INCOME

Operating income increased by £1152 million in 2023 to £5711 million, predominantly due to the

IW&I business contributing £879 million of income for the final quarter of the financial year

following completion of the combination.

Excluding IW&I, the increase in total income is largely driven by higher interest revenues, reflecting

the rising interest rate environment during the year and the benefit of the group’s banking activities.

Recurring investment management fees and asset management income benefited from higher

average markets and the continued migration of Saunderson House client assets into Rathbones

investment solutions, which moved this income £77 million (23%) higher. This was offset by a short

term reduction in Saunderson House advice income during the client migration process and lower

transaction-based investment management commission income, as the trend towards cleaner

fee-only charges continued.

OPERATING EXPENSES

Operating expenses of £5135 million (2022: £3918 million) comprise underlying operating

expenses discussed below, together with non-underlying operating expenses discussed on page 34.

Underlying operating expenses increased by £852 million (237%) to £4440 million (2022:

£3588million). £625 million of this increase is due to IW&I costs incurred since completion of the

combination, consisting of £294 million fixed staff costs, £143 million variable compensation, and

£188 million non-staff costs.

Underlying operating expenses excluding IW&I increased by 63% to £3814 million (2022: £3588

million). Underlying staff costs in the year (excluding IW&I), increased by £243 million to £2699

million (2022: £2456 million). Some £132 million of this increase is the result of higher average

headcount (excluding that relating to Saunderson House and staff engaged on digital capability).

Salary inflation increased costs by £73 million. The balance of the increase reflects the effect of

inflation on other staff-related costs and other specific factors.

Year-on-year decreases in spend within Saunderson House and the strategic investment in

developing our digital capability was partially offset an increase of £48 million (2022: £180 million

increase) in non-staff costs excluding IW&I. The cost base of the Saunderson House business

decreased by £32 million in 2023 due to the delivery of cost synergies and a reduction in the

Saunderson House FSCS levy. The remainder of the group also benefited from a one-off reduction

inthe FSCS levy, which reduced by £46 million for the group overall relative to 2022 prior to an

expected return to normal levels in 2024. Strategic investment in developing our digital capability

was £19 million lower than prior year at £144 million (2022: £163 million). The Charles River

Investment Management Solution was successfully launched in theRathbones Asset Management

business during the year. The development of our client lifecycle management system has continued

during the year and is now expected to go live mid-way through 2024, albeit with the overall cost

expected to increase from £400 million to £450 million, as set out in our Q32023 statement.

Rathbones average headcount rose by 217% to 2498 (2022: 2053) (see note 10). Rathbones

headcount excluding IW&I rose by 58% to 2173 in 2023 (2022: 2053), reflecting additional client

facing roles and related support in addition to recruiting further change and technology resource,

including that which is part of our preparation for delivering the integration of IW&I.

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

33RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

FINANCIAL PERFORMANCE CONTINUED

TABLE 3. RECONCILIATION OF UNDERLYING PERFORMANCE MEASURES TO CLOSEST EQUIVALENT

IFRS MEASURES

2023 comprises

2023

£m

(unless stated)

IW&I

£m

(unless stated)

Rathbones

excl. IW&I

£m

(unless stated)

2022

£m

(unless stated)

Operating income 571.1 87. 9 483.2 4559

Underlying operating expenses

(444.0) (62.5) (381.5) (3588)

Underlying profit before tax

127.1 25.4 101.7 971

Charges in relation to client relationships

andgoodwill

(25.2) (6.3) (18.9) (195)

Acquisition-related and integration costs

(44.3) (4.1) (40.2) (135)

Profit before tax

57.6 15.0 42.6 641

Taxation

(20.1) (151)

Profit after tax

37.5 490

Operating margin

10.1% 141%

Underlying operating margin

22.3% 213%

Weighted average number of shares in issue

71.3m 586m

Earnings per share (p)

52.6 836

Underlying earnings per share (p)

135.8 1308

Quarterly average total equity

787. 9 6327

Underlying quarterly average total equity

798.5 6504

ROCE

4.9% 77 %

Underlying ROCE

12.1% 118%

1. Operating income less underlying operating expenses

2. Underlying profit before tax as a percentage of operating income

3. Underlying profit after tax divided by the weighted average number of shares in issue

4. Quarterly average equity adjusted for underlying operating expenses

5. Profit after tax as a percentage of quarterly average total equity

6. Underlying profit after tax as a percentage of underlying quarterly average total equity

ALTERNATIVE PERFORMANCE MEASURES

Alternative Performance Measures (APMs) are a financial measure of historical or future financial

performance, financial position, or cash flow, other than a financial measure under IFRS.

CHARGES IN RELATION TO CLIENT RELATIONSHIPS AND GOODWILL (NOTE 22)

As explained in notes 114 and 21, client relationship intangible assets are recognised when we

acquire a business or investment management contracts as a result of the recruitment of experienced

investment managers who have the capability to attract significant FUMA to the group.

These intangible assets are amortised over the expected duration of the respective client

relationships. The amortisation is charged to the income statement each year. This represents a

significant non-cash profit and loss item which is therefore excluded from underlying profit in order

to present an alternative measure that represents largely cash-based results of the financial reporting

period. These amortisation charges are therefore excluded from underlying profit, which otherwise

represents largely cash-based earnings and more directly relates to the financial reporting period.

Research analysts commonly exclude these amortisation costs when comparing the performance

offirms in the wealth management industry.

ACQUISITIONRELATED AND INTEGRATION COSTS (NOTE 9)

Acquisition and integration-related costs are significant non-recurring costs that arise from strategic

investments to grow the business rather than from the business’ operating activities and are therefore

excluded from underlying results.

These costs primarily comprise professional fees directly related to the execution of the relevant

transaction, certain elements of deferred consideration that are conditional upon continuing

employment with the group and the costs of integrating the acquired businesses with those of the

existing group.

Deferred consideration costs are generally significant payments that form part of the total

consideration payable under the terms of the acquisition agreement and are considered to be capital

in nature, reflecting the cost to acquire the business and the transfer of its ownership. However, in

accordance with IFRS 3, any deferred consideration that is payable to former shareholders of the

acquired business who are required to remain in employment with the group must be treated as

remuneration and are therefore expensed to the income statement over the period to which the

employment condition applies.

STRATEGIC

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FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

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34RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

FINANCIAL PERFORMANCE CONTINUED

During 2023, £39 million of deferred consideration payments (2022: £65 million) and £29 million

of integration costs (2022: £34 million) were charged to the income statement in relation to the

acquisition of Saunderson House. In addition, £10 million of deferred consideration payments

werecharged to the income statement in relation to the acquisition of Speirs and Jeffery (2022:

£35million).

During 2023, £365 million of acquisition and integration costs have been incurred as a result of the

IW&I transaction. This comprised £213 million of one-off legal and professional costs relating to the

execution of the transaction, £62 million of costs relating to awards made to key employees of the

business, and £90 million of integration costs, which form part of the total expected costs to deliver

the integration and achieve the related synergies.

ACQUISITION RELATED PROPERTY COSTS (NOTE 9)

As part of the process of integrating IW&I with the existing Rathbones group, it is expected that

someleasehold properties will be vacated earlier than their respective lease expiry dates. The useful

lives of these properties’ right-of-use assets and their fixtures and fittings were revised to reflect the

expected exit dates. Consequently, the assets’ residual values were calculated and their depreciable

amounts were restated during the year. The assets were also reviewed for impairment at 31

December 2023 to determine whether their carrying amounts could be supported by their

recoverable amounts. As a result, the group recognised £45 million in relation to accelerated

depreciation and impairment charges on property assets during the year. These costs represent

additional non-recurring costs in excess of the normal ongoing operating costs incurred in relation to

the group’s properties and were recognised as non-underlying operating expenses, and are therefore

not included within underlying operating profit. They form part of the total acquisition and

integration costs of £365 million referred to above.

TAX ATION

The corporation tax charge for 2023 was £201 million (2022: £151 million) (see note 11). The

effective tax rate increased to 349% in 2023 (2022: 235%), this reflected the increase in the average

statutory rate to 235% (2022: 190%) and the impact of disallowable legal and professional costs

incurred in relation to the IW&I transaction.

In 2024, we expect the effective tax rate to return to 4 to 5 percentage points above the statutory

rate(reflecting disallowable costs for deferred consideration payments (see note 23), as the impact

ofIW&I disallowable expenses experienced in 2023 will not be repeated given these costs are

non-recurring.

BASIC EARNINGS PER SHARE

Basic earnings per share for the year ended 31 December 2023 were 526p (2022: 836p). The

decrease in the year reflects the impact of the IW&I combination costs on statutory profit after tax,

the increase in the statutory rate of tax and the increased number of shares in issue.

On an underlying basis, basic earnings per share were 1358p in 2023, compared to 1308p in 2022

(see note 13). The increase in the year is due to increased underlying profit after tax that has been

partially offset by the increased number of shares and the increase in the statutory rate of tax.

RETURN ON CAPITAL EMPLOYED

The board monitors the underlying return on capital employed (ROCE) as a key performance

measure. For monitoring purposes, underlying ROCE is defined as underlying profit after tax

expressed as a percentage of underlying quarterly average total equity across the year.

Assessment of underlying return on capital is a key consideration for all investment decisions,

particularly in relation to acquired growth.

In 2023, underlying ROCE was 121% (2022: 118%). Underlying quarterly average total equity

increased by £1481 million in 2023 compared to 2022, reflecting the share issue for the IW&I

combination with effect from the fourth quarter.

STRATEGIC

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GOVERNANCE

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35RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

SEGMENTAL REVIEW

The group operates through two segments: Wealth Management and Asset Management.

TABLE 4. RECONCILIATION OF SERVICE LEVELS TO SEGMENTAL PRESENTATION AS AT

31 DECEMBER 2023

Wealth

Management

FUMA

(including

intra-group

holdings)

£bn

Intra-group

holdings

£bn

Wealth

Management

FUMA

£bn

Asset

Management

FUMA

£bn

Group

FUMA

£bn

Rathbones Investment

Management 488 (43) 445 43 488

Bespoke portfolios 450 (06) 444 06 450

Managed via in-house funds 38 (37) 01 37 38

Multi-asset funds − − − 25 25

Rathbones discretionary and

managed

48.8 (4.3) 44.5 6.8 51.3

Non-discretionary service 07 – 07 − 07

IW&I 423 − 423 − 423

Saunderson House 16 (03) 13 03 16

Total wealth management

93.4 (4.6) 88.8 7.1 95.9

Single-strategy funds − − − 67 67

Execution only and banking 27 − 27 − 27

Total group

96.1 (4.6) 91.5 13.8 105.3

1. Intra-group holdings represent in-house funds held within an Investment Management portfolio

WEALTH MANAGEMENT

The activities of the group are described in detail on pages 2 to 5. The Wealth Management segment

comprises those activities described under the headings ‘Investment Management’, ‘Financial

Planning and Advice’ and ‘Complementary services’ on page 2. The results of the Wealth

Management segment described below include the trading results of Rathbones Investment

Management, Rathbones Trust Company, Vision Independent Financial Planning, Saunderson

Houseand IW&I.

Wealth Management income is largely driven by revenue margins earned from FUMA. Revenue

margins are expressed as a basis point return, which depends on a mix of tiered fee rates,

commissions charged for transactions undertaken on behalf of clients and the interest margin

earnedon cash in client portfolios and client loans.

FUNDS UNDER MANAGEMENT AND ADMINISTRATION

Year-on-year changes in the key performance indicators for Wealth Management are shown in table 5

(which incorporates IW&I in 2023). Total Wealth Management FUMA increased by 860% to £915

billion as at 31 December 2023. The majority of this increase was driven by the combination with

IW&I, which added £408 billion to the Group’s FUMA from 30 September 2023 following completion

of the combination. Excluding the acquired IW&I FUMA, Wealth Management FUMA has increased

by 30% during the year.

CHART 1. WEALTH MANAGEMENT – NUMBER OF CLIENTS AND INVESTMENT MANAGERS

TABLE 5. WEALTH MANAGEMENT – KEY PERFORMANCE INDICATORS

2023 2022

FUMA at 31 December £91.5bn £492bn

Rate of total net growth (net flows) in Wealth Management funds under

management and administration

0.3% 12%

Average net operating basis point revenue margin

74.3bps 724 bps

Number of Investment Management clients

114 68

Number of investment managers 681 355

1. See table 6 (percentages calculated on unrounded figures)

2. See table 10

3. The basis of this calculation is dependent on the way client data is structured on the relevant operating systems. It is therefore

not practicable to apply consistent methodologies across the RIM and IW&I businesses until the migration onto a single system

has been completed. We expect the number to change following migration, but consider the figure disclosed to be appropriate

in the interim period

23 379 302 681

45.2 114.269.0

352

67.7

332

66.5

Number of investment managers

Number of investment management clients (’000)

Incremental uplift from IW&I

STRATEGIC

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GOVERNANCE

REPORT

FURTHER

INFORMATION

36RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

SEGMENTAL REVIEW CONTINUED

TABLE 6. WEALTH MANAGEMENT – FUNDS UNDER MANAGEMENT AND ADMINISTRATION

Year ended

31 December

2023

£bn

Year ended

31 December

2022

£bn

As at 1 January 49.2 552

Inflows

46.3 41

— organic

5.5 40

— acquired

40.8 00

Outflows

(6.1) (37)

Market movement

2.1 (63)

Total group

91.5 492

Rate of total net growth

0.3% 12%

1. Value at the date of transfer in/(out)

2. Value at date of acquisition, includes £42.3 billion IW&I FUMA acquired with effect from 30 September 2023

3. Represents the impact of market movements and investment performance

4. Net new business and acquired inflows as a percentage of opening funds under management and administration

excluding SHL and IWI

Table 6 reconciles the movement in FUMA during the year. Organic inflows of £55 billion, 112%

ofopening FUM are dominated by flows into discretionary bespoke portfolios, with 33% of flows

coming from the adviser channel as our revised ‘Reliance on Adviser’ proposition rolled out (2022:

306%). 'Reliance on Adviser' is an operating model with which financial advisers can engage with

RIM. It is an approach whereby client suitability rests with the adviser, affording them total control

over their client relationship and the advice process. Our investment managers retain responsibility

for the suitability of the portfolio and for executing the mandate that has been requested by the

adviser on the client's behalf. Outflows of £61 billion, representing 124% of opening FUM are

elevated as a result of market conditions, with existing clients making partial withdrawals of their

investments to repay debt (which has become increasingly expensive in the environment of higher

interest rates) and meet the higher cost of living, along with those relating to property purchases

andinheritance tax planning. In addition, outflows also reflect the loss of two large charity mandates

during the year.

Saunderson House FUMA stood at £13 billion at 31 December 2023 (2022: £41 billion). The

reduction during the year reflects the continuing progress that has been made to migrate Saunderson

House clients into Rathbones investment solutions. Once migrated, this FUMA is included with

Wealth Management or Asset Management FUMA depending on the proposition that the FUMA has

moved to. At the year end, FUMA on Vision Independent Financial Planning’s discretionary wealth

management platform that was not managed by the group (and is not therefore included in the

Group’s FUMA) totalled £09 billion (2022: £08 billion).

Table 7 (overleaf) provides an analysis of FUMA and new business by channel and service level.

Growth in discretionary and managed net flows is driven by interactions through financial adviser

networks, helped by the impact of Saunderson House new business flows. £24 billion of assets were

migrated from Sanderson House in 2023 and the remaining £13 billion of assets are expected to be

migrated in 2024.

Switches into execution-only services largely reflect the transfer of clients' funds into probate

following their death (£04 billion).

IW&I net outflows of £03 billion include the effect of expected outflows related to investment

manager departures that predominantly occurred prior to the announcement of the combination.

Since then, investment manager turnover has been low.

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The high inflation rates experienced in 2022 continued into 2023, resulted in Rathbones adopting a

cautious approach on bonds, with a preference for shorter-dated debt less sensitive to changes in

interest rate expectations.

From September we became much more optimistic on longer-dated government bonds, particularly

east of the Atlantic and, indeed, bond markets have rallied strongly as they look ahead to rate cuts in

2024 following a plunge in key measures of inflation in the UK and Eurozone.

Overall, 2023 was another strong year for our specialist teams. Greenbank Investments continued to

grow its net new business by 33%, despite the difficult market, and reached FUMA of £21 billion at

31 December 2023 (2022: £19 billion). The Personal Injury and Court of Protection business ended

2023 with £13 billion of FUMA (2022: £10 billion).

Rathbone Financial Planning also saw a strong year in 2023, increasing revenues by 18% from 2022,

and growing FUMA to £20 billion as at 31 December 2023 (31 December 2022: £16 billion).

Vision Independent Financial Planning grew well in 2023, advising on client assets of £33 billion at

the year end (2022: £26 billion), and seeing a net growth in the network of IFAs to 138 at the year

end (2022: 130).

Saunderson House has made significant progress in migrating assets to the new Rathbones'

proposition. £27 billion of Saunderson House clients' assets are now invested in Rathbones' products

(2022: £63 million), with £13 billion (2022: £41 billion) of assets remaining under management by

Saunderson House at year end. It is expected that the migration process will be completed by the end

of June 2024.

TABLE 7. WEALTH MANAGEMENT – NEW BUSINESS BY CHANNEL ON A PROFORMA BASIS

Opening FUMA

- pro forma basis

£bn

Gross

inflows

£bn

Gross

outflows

£bn

Net flows

£bn

Transfers

£bn

SHL migrated

FUMA

£bn

Market

movement &

performance

£bn

2023

Gross closing

£bn

2023

Intra-group

holdings

£bn

2023

Net closing

FUMA

£bn

2022

Net FUMA

£bn

Bespoke portfolios 330 26 (27) (01) (09) − 10 330 − − −

Managed via in-house funds 07 01 (01) − 06 − 01 14 − − −

Total direct

33.7 2.7 (2.8) (0.1) (0.3) – 1.1 34.4 – – −

Bespoke portfolios 99 12 (08) 04 (01) 11 07 120 − − −

Managed via in-house funds 07 03 (02) 01 02 13 01 24 − − −

Total financial adviser linked

10.6 1.5 (1.0) 0.5 0.1 2.4 0.8 14.4 – – −

Total discretionary and managed

44.3 4.2 (3.8) 0.4 (0.2) 2.4 1.9 48.8 (4.3) 44.5 420

Execution only and banking 24 03 (06) (03) 04 − 02 27 − 27 24

Non-discretionary service 07 01 (01) − (01) − 01 07 − 07 07

Total wealth management

47.4 4.6 (4.5) 0.1 0.1 2.4 2.2 52.2 (4.3) 47.9 450

Saunderson House 41 01 (05) (04) − (24) 03 16 (03) 13 41

IW&I 408 08 (11) (03) (01) − 19 423 − 423 −

Total Wealth Management for

enlarged group

92.3 5.5 (6.1) (0.6) – – 4.4 96.1 (4.6) 91.5 491

1. 2023 Group FUMA and flows by service level has been prepared on a proforma basis, opening FUMA has been uplifted by £40.8 billion to include IW&I FUMA acquired as at 30 September

2. Holdings of the group’s in-house funds in Investment Management client portfolios and in-house funds for which the management of the assets is undertaken by Investment Management teams; the corresponding FUMA is reported within Funds

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FINANCIAL PERFORMANCE

Underlying profit before tax in Wealth Management increased by 491% in the year to £1054 million,

this represents an underlying operating margin of 209% (2022: 180%), which, when adjusted to

exclude £144 million of operating expenses incurred in relation to the delivery of digital strategy,

rises to 238% (2022: 221%).

Net investment management fee income increased by £752 million (274%) in 2023. £701 million of

the increase is attributable to the effect of the IW&I combination in the final quarter of 2023. The

remaining £51 million uplift is due to higher FUMA in the Wealth Management segment excluding

IW&I, reflecting the benefit of new revenues generated from the migration of Saunderson House

funds and the favourable market movement, with the average level of the MSCI PIMFA Balanced

index at the quarterly billing dates being 22% higher than the prior year.

Net commission income increased by 96% to £536 million (2022: £489 million). A £94 million

uplift in commission income as a result of the IW&I combination has been partially offset by a

reduction of £47 million in the Wealth Management segment excluding IW&I commission income

due to the continued movement towards a fee-only basis of charging, which is increasingly replacing

transaction-based commission charges.

The increase in the Bank of England Base Rate from 35% at the start of 2023 to 525% by December

2023 contributed an additional £321 million to net interest income in the year. The rates of interest

payable to clients in respect of the cash element of their portfolios also increased significantly during

the year as we ensured our interest rates remained competitive. However, the overall increase in our

net interest margin illustrates the benefit of our banking permissions.

Fees from advisory services and other income fell by 21% to £503 million. Fees from advisory and

other services excluding IW&I fell by 158% (2022: 883% increase). This expected reduction was

partially offset by £70 million of other income from IW&I, as advice fees to Saunderson House clients

were suppressed during the period in light of the extent to which advice was related to the migration

process. We expect advice fee levels relating to Saunderson House clients to recover once the

migration of assets has been completed.

Underlying operating expenses during the year were £3985 million (see table 11); an increase of

236% on the prior year. When adjusted for Q4 IW&I underlying expenses of £625 million, the

year-on-year increase in underlying expenses for the Wealth Management segment excluding IW&I

is£137 million (2022: £478 million). An £83 million increase in fixed staff costs (2022: £202

million) was partially offset by a reduction of £30 million (2022: £50 million increase) in variable

staff costs due to a number of profit share schemes vesting in 2022. Other operating expenses of

£1542 million (2022: 1459 million) include property, depreciation, settlement, IT, finance and

othercentral support services.

TABLE 8. WEALTH MANAGEMENT – FINANCIAL PERFORMANCE

2023 Comprises

2023

£m

IW&I

£m

Rathbones

excl. IW&I

£M

2022

£m

Net investment management fee income

350.1 70.1 280.0 2748

Net commission income

53.6 9.4 44.2 489

Net interest income

49.9 1.4 48.5 178

Fees from advisory services

and other income 50.3 7.0 43.3 514

Operating income

503.9 8 7.9 416.0 3929

Underlying operating expenses

34

(398.5) (62.5) (336.0) (3223)

Underlying profit before tax

105.4 25.4 80.0 707

Underlying operating margin

20.9% 28.9% 19.2% 180%

1. Net investment management fee income is stated after deducting fees and commission expenses paid to introducers

2. Rathbones excl. IW&I Fees from advisory services includes income from trust, tax and financial planning services

(including Vision and Saunderson House)

3. See table 11

4. Included within underlying operating expenses are £14.4 million of costs relating to the group’s digital strategy, of which

£1.6 million relates to asset management

5. Underlying profit before tax as a percentage of operating income. Excluding £14.4 million of expenditure on our digital

strategy in the year, the underlying operating margin was 23.8%

TABLE 9. WEALTH MANAGEMENT – AVERAGE FUNDS UNDER MANAGEMENT AND ADMINISTRATION

2023

£bn

2022

£bn

Valuation dates for billing

— 5 April

45.7 479

— 30 June

45.4 438

— 30 September

45.4 432

— 31 December

48.0 451

Quarterly average

46.1 450

Average MSCI level

1,721 1684

IW&I

2023

£bn

2022

£bn

Valuation dates for billing

— 30 November

40.7 −

Average MSCI level

1,700 −

1. Rathbones quarterly average FUMA excluding Saunderson House and IW&I

2. MSCI PIMFA Balanced Index considered to reflect Rathbones' composition of portfolios most closely. Based on the corresponding

valuation dates for billing

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39RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

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TABLE 10. WEALTH MANAGEMENT – REVENUE MARGIN

2023

£m

2022

£m

Basis point return

from:

— fee income

61.5 611

— commission

9.5 108

— interest

3.3 05

Basis point return on FUMA

74.3 724

1. Operating income (see table 8), excluding interest on own reserves, interest payable on Tier 2 notes issued, interest payable on

lease assets, fees from advisory services and other income, divided by the average funds under management and administration

on the quarterly billing dates (see table 9)

Other operating expenses of £1731 million include property, depreciation, settlement, IT, finance

and other central support services costs (2022: £1459 million).

The basis point return on fund under management and administration for the Wealth Management

segment excluding IW&I increased by 05bps in the year to 729bps, this is predominately due to the

increase in interest income, offset by lower commission as a higher proportion of clients have

migrated to fee-only rates.

TABLE 11. WEALTH MANAGEMENT – UNDERLYING OPERATING EXPENSES

2023

£m

2022

£m

Staff costs

— fixed 147. 2 1095

— variable

78.2 669

Total staff costs

225.4 1764

Other operating expenses

173.1 1459

Underlying operating expenses

398.5 3223

Underlying cost/income ratio

79.1% 820%

1. Represents the costs of investment managers and teams directly involved in client-facing activities

2. Underlying operating expenses as a percentage of operating income (see table 8)

ASSET MANAGEMENT

The financial performance of the Asset Management segment is principally driven by the value of

FUM. Year-on-year changes in the key performance indicators for asset management are shown in

table 12.

FUNDS UNDER MANAGEMENT

Following the challenging trading conditions in 2022, 2023 continued to be a tough environment

forthe industry. Net redemptions in the asset management industry to 30 November 2023 totalled

£416 billion (£497 billion in the full year to December 2022), as reported by the Investment

Association (IA), albeit mainly in the institutional space. Industry-wide funds under management

grew by only 15% to £14 trillion at the end of November 2023.

Gross inflows in Rathbones Asset Management improved 48% from £31 billion to £46 billion in

2023, with Saunderson House assets migrating into Rathbones funds responsible for a large part of

this growth. Continued investor concerns over inflation, interest rates and equity market valuations

have driven cautious investor sentiment. Despite these macroeconomic impacts on investor

confidence, our range of funds, well balanced between multi-asset and single-strategy, has helped

serve our clients’ changing needs and provided some shelter from the market volatility for our overall

FUM. The diverse nature of our multi-asset investment mix, and thus its obvious continuing appeal

to clients in these tougher times, has ensured that positive net flows have continued to stream into

these funds, creating some offset for the outflows experienced in the single-strategy space.

Investors continue to exhibit an elevated propensity for withdrawing some of their investable assets

to pay down debt, which has become increasingly expensive, and meet rising costs of living. These

factors have led to a continuation of the elevated gross outflows experienced in 2022. Strong gross

flows, leading to positive net flows in Multi-asset funds and favourable investment performance

offsetting net outflows in single strategy funds, ensured total funds under management grew to a

record high of £138 billion at the end of 2023, an increase of 255% during the year (see table 14).

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TABLE 12. ASSET MANAGEMENT – KEY PERFORMANCE INDICATORS

2023 2022

FUM at 31 December

£13.8bn £110bn

Rate of net growth in Asset Management FUM

13.7% 04%

Underlying profit before tax

£21.7m £264m

1. See table 14

2. See table 16

TABLE 13. ASSET MANAGEMENT – FUNDS UNDER MANAGEMENT BY PRODUCT

2023

£bn

2022

£bn

Rathbone Global Opportunities Fund 3.6 34

Rathbone Multi-Asset Portfolios

5.3 30

Rathbone Ethical Bond Fund

2.2 22

Rathbone Income Fund

0.7 07

Offshore funds

0.6 06

Rathbone Active Income Fund for Charities

0.2 02

Rathbone High Quality Bond Fund

0.2 02

Greenbank Multi-Asset Portfolios

0.4 02

Other funds

0.1 02

Rathbone Core Investment Fund for Charities

0.2 01

Rathbone Strategic Bond Fund

0.1 01

Rathbone Global Sustainability Fund

0.1 01

Rathbone UK Opportunities Fund

0.1 −

13.8 110

1. £213 million of ‘Bespoke’ other funds transferred out during 2022 post the switch of Authorised Corporate Director (ACD)

from Rathbones Asset Management Limited to Evelyn Partners, an independent ACD

CHART 2. FUNDS – ANNUAL NET FLOWS (£M)

2,076

1,511

943

1,498

Despite adverse market conditions, Rathbones featured in the Pridham Report industry top ten

fornet retail sales in all 4 quarters of 2023 as well as fifth for net retail sales in the full year.

Volatility managed funds (multi-asset portfolios) were the IA’s top net seller in the year up to

November 2023 with £58 billion of net sales and this trend was mirrored in Rathbones which

accounted for 33% of the industry total, with net sales in the year, totalling £19 billion in the year

toNovember 2023 and £21 billion in the full year, up £14 billion when compared to 2022.

Rathbones largest fund, Rathbone Global Opportunities Fund, saw a net £305 million outflow over

the course of the year.

Rathbone Ethical Bond Fund also suffered from net redemptions in the year (£187 million), due to

the market uncertainty brought on by the volatility in bond yields. Both funds, however, delivered

positive market returns in the year ensuring that, overall, both funds grew year-on-year.

The Ethical Bond and Global Opportunities funds maintained their excellent industry long-term

track performance records and both finished the year in the first quartile for performance measured

over five years, which is a key factor in investors’ decision-making.

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41RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

During the year, the total number of investment professionals running the funds reduced by one to

23 at 31 December 2023 (2022: 24).

TABLE 14. ASSET MANAGEMENT – FUNDS UNDER MANAGEMENT

2023

£bn

2022

£bn

As at 1 January 11.0 130

Net inflows

1.5 −

— inflows

4.6 31

— outflows

(3.0) (29)

— Bespoke

– (02)

Market adjustments

1.3 (20)

As at 31 December

13.8 110

Rate of net growth

13.7% 04%

1. Valued at the date of transfer in/(out)

2. Bespoke funds transferred out during 2022 post the switch of Authorised Corporate Director ('ACD') from Rathbones Asset

Management Limited to Evelyn Partners, an independent ACD

3. Impact of market movements and relative performance

4. Net inflows as a percentage of opening FUM

In 2022£2130 million of ‘Bespoke’ other funds transferred out during the year post the switch of

the Authorised Corporate Director (ACD) from Rathbones Asset Management Limited to Evelyn

Partners, an independent ACD.

SEGMENTAL REVIEW CONTINUED

TABLE 15. ASSET MANAGEMENT – PERFORMANCE

1, 2, 4

2023/(2022) Quartile ranking over 1 year 3 years 5 years

Rathbone Ethical Bond Fund 1 (2) 2 (2) 1 (1)

Rathbone Global Opportunities Fund 1 (4) 3 (2) 1 (1)

Rathbone Income Fund 3 (2) 2 (2) 2 (2)

Rathbone Strategic Bond Fund 1 (3) 3 (3) 3 (3)

Rathbone UK Opportunities Fund 1 (4) 4 (4) 4 (4)

1. Quartile ranking data is sourced from FE Trustnet

2. Excludes multi-asset funds (for which quartile rankings are prohibited by the Investment Association (IA)), High Quality Bond

Fund, which has no relevant peer group against which to measure quartile performance, non-publicly marketed funds and

segregated mandates

3. Ranking of institutional share classes at 31 December 2023 and 2022 against other funds in the same IA sector, based on total

return performance, net of fees (consistent with investment performance information reported in the funds’ monthly factsheets)

4. Funds included in the above table account for 59% of the total FUM of the fund's business

FINANCIAL PERFORMANCE

Asset management’s income is primarily derived from annual management charges, which are

calculated on a daily basis on the value of FUM of each fund, net of rebates payable to intermediaries.

Net annual management charges increased to £647 million in 2023, reflecting the rise in average

FUM. Net annual management charges as a percentage of average FUM fell by 09bps to 539 bps

(2022: 548 bps), led by a higher proportion of FUMA held in S-Class units in the Multi Asset funds,

which have a lower annual management charge. Alongside higher net annual management charges,

interest and other income increased by £17 million in the year. As a result, total operating income as

a percentage of average FUM increased to 554 bps in 2023 from 547 bps in 2022.

Underlying operating expenses detailed in Table 17 increased by £89 million to £455 million (2023:

£366 million). Fixed staff costs of £71 million for the year ended 31 December 2023 were £02

million higher than 2022. This reflects general inflationary rises as well as the impacts of staffing

changes in the period.

Variable staff costs of £134 million were 196% higher than 2022. These costs relate to deferred

awards which are spread over multiple years, the current year cost does not solely reflect

performance in the current year.

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42RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

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Other operating expenses have increased by 359% to £250 million in 2023. A large part of this cost

increase relates to direct investment in our core Charles River system, enhancing functionality and

creating an efficient platform for delivering to existing clients as well as positioning the business well

for future growth. Recurring operational spend in the Asset Management segment for the Charles

River Investment Management Solution is £15 million per annum . The operating margin net of

these investment costs was 37%. Administration costs of £61 million were up £08 million on 2022,

driven by increasing FUM and flows, as well as inflationary indexing on third-party supplier

contracts, which was also evident on technology costs.

TABLE 16. ASSET MANAGEMENT – FINANCIAL PERFORMANCE

2023

£m

2022

£m

Net annual management charges 64.7 622

Interest and other income

2.5 08

Operating income

67. 2 630

Underlying operating expenses

(45.5) (366)

Underlying profit before tax

21.7 264

Operating % margin

32.3% 419%

1. See table 17

2. Underlying profit before tax divided by operating income

TABLE 17. ASSET MANAGEMENT – UNDERLYING OPERATING EXPENSES

2023

£m

2022

£m

Staff costs

— Fixed

7.1 70

— Variable

13.4 112

Total staff costs

20.5 182

Other operating expenses

25.0 184

Underlying operating expenses

45.5 366

Underlying cost/income ratio

67. 5% 579 %

1. Underlying operating expenses as a percentage of operating income (see table 16)

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43RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FINANCIAL POSITION

OWN FUNDS

As a banking group, Rathbones is required to operate in accordance with the requirements relating to

capital resources and banking exposures prescribed by the Capital Requirements Regulation, as

applied in the UK by the Prudential Regulation Authority (PRA).

The group is required to ensure it maintains adequate capital resources to meet its combined pillar 1

and pillar 2 requirements.

At 31 December 2023, the group’s regulatory own funds (including verified profits for the year) were

£4714 million (2022: £3387 million). The increase in the year of £1327 million was the result of the

issue of new share capital to fund the group’s acquisition of IW&I. The effect on own funds of the new

shares issued, which resulted in a £22 million increase in share capital and a £7474 million increase

in the merger reserve (net of £22 million of share issue costs) (see table 19) was partly offset by the

£5851 million increase in goodwill and intangible assets resulting from the acquisition.

The net increase in own funds was partially offset by an increase in the group’s total capital

requirement and combined buffers of £1064 million, which reflected the inclusion of IW&I in the

group. The resulting in a capital surplus at the end of 2023 of £1345 million represents an increase of

£242 million relative to the surplus of £1103 million 31 December 2022.

The CET1 ratio was 178%, broadly in line with the 179% reported at the previous year-end. This

increase in the Pillar 1 requirement (see table 20) as a consequence of the enlarged group, was

countered by the increased capital resources (see table 19)

The leverage ratio was 187% at 31 December 2023, up from 176% at 31 December 2022. The

leverage ratio represents our Tier 1 capital (own funds) as a percentage of the group’s total assets

(exposure measure), excluding central bank exposure, intangible assets, plus certain off-balance

sheet exposures. Whilst total assets and tier one capital increased in the year due to the IW&I

combination, assets excluded from the exposure measure (central bank exposure and regulatory

deductions) represented a lower proportion of the balance sheet. This resulted in an uplift to the

leverage ratio.

At 31 December 2023, neither Rathbones Investment Management Limited nor the Rathbones Group

were subject to a minimum leverage ratio requirement, although monitoring is undertaken on a

regular basis against the minimum leverage requirement of 325% which applies to larger banks.

The business is primarily funded by equity, but also supported by £399 million of ten-year tier 2

eligible subordinated loan notes, which were issued in October 2021. The notes introduced a small

amount of gearing into our balance sheet as a way of financing future growth in a cost-effective and

capital-efficient manner. They are repayable in October 2031, with a call option for the issuer

annually from 2026. Interest is payable at a fixed rate of 5642% per annum until the first option call

date, and at a rate of 4893% over Compound Daily SONIA thereafter (note 28).

As a result of the factors set out above, the total equity of the group (comprising share capital, share

premium and reserves, net of own shares held) was £13502 million at 31 December 2023, up

1127% from £6348 million at the end of 2022.

OWN FUNDS AND LIQUIDITY REQUIREMENTS

As required under PRA rules, we perform an Internal Capital Adequacy Assessment Process (ICAAP)

and Internal Liquidity Adequacy Assessment Process (ILAAP) annually for the consolidated group,

which include performing a range of stress tests to determine the appropriate level of regulatory

capital and liquidity that the group should hold. In addition, we monitor a wide range of capital and

liquidity statistics on a daily, monthly or other frequency basis as required. Surplus capital levels are

forecast on a monthly basis, taking account of anticipated dividend and investment requirements, to

ensure that appropriate buffers are maintained. Investment of proprietary funds is controlled by our

treasury department.

We are required to hold capital to cover a range of own funds requirements.

TABLE 18. GROUP’S FINANCIAL POSITION

2023

£m

(unless stated)

2022

£m

(unless stated)

Own funds

— Common Equity Tier 1 ratio

17. 8% 179 %

— Total own funds ratio

19.4% 203%

— Total retained earnings

263.7 29 7 2

— Tier 2 subordinated loan notes

39.9 399

— Total risk exposure amount

2,425.6 16668

— Leverage ratio

18.7% 176%

Other resources:

— Total assets

4,224.4 34 47 2

— Treasury assets

2,601.0 26641

— Investment Management loan book

101.7 1597

— Intangible assets from acquired growth

502.7 3427

— Tangible assets and software

30.9 262

Liabilities:

— Due to customers

2,253.3 25161

— Net defined benefit pension asset

7.0 94

1. Common Equity Tier 1 capital as a proportion of total risk exposure amount

2. Total own funds (see table 19) as a proportion of total risk exposure amount

3. Represents the carrying value of the Tier 2 loan notes (see note 28)

4. Tier 1 capital as a percentage of total assets, excluding intangible assets, plus certain off-balance-sheet exposures

5. Balances with central banks, loans and advances to banks and investment securities

6. See note 16 to the financial statements

7. Net book value of acquired client relationships and goodwill (note 22)

8. Net book value of property, plant and equipment and computer software (notes 19 and 22)

9. Total amounts of cash in client portfolios held by Rathbones Investment Management as a bank (note 24)

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44RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FINANCIAL POSITION CONTINUED

TABLE 19. GROUP’S REGULATORY OWN FUNDS

2023

£m

2022

£m

Share capital and share premium 31 7.7 3132

Reserves 1,088.1 3742

Less:

Own shares (55.6) (526)

Intangible assets

(911.8) (3267)

Retirement benefit asset

( 7.0) (94)

Common Equity Tier 1 own funds 431.4 2987

Tier 2 own funds 40.0 400

Total own funds 471.4 3387

1. Net book value of goodwill, client relationship intangible assets and software is deducted directly from own funds, less any

related deferred tax

2. The retirement benefit asset is deducted directly from own funds

TABLE 20. GROUP’S OWN FUNDS REQUIREMENTS

2023

£m

2022

£m

Credit risk requirement 72.3 663

Market risk requirement – 11

Operational risk requirement 121.7 659

Pillar 1 own funds requirement 194.0 1333

Pillar 2A own funds requirement 39.4 400

Total Capital Requirement (‘TCR’) 233.4 1733

Combined buffer:

Capital Conservation Buffer (CCB) 60.6 416

Countercyclical Capital Buffer (CCyB) 42.9 135

Total Capital Requirement (‘TCR’) and Combined buffer 336.9 2284

2023

£m

2022

£m

Total capital surplus 134.5 1103

The purpose of each component of the regulatory capital requirement and what it comprises is set

outbelow.

PILLAR 1 OWN FUNDS REQUIREMENT

Pillar 1 determines a total risk exposure amount (also known as ‘risk-weighted assets’) for the group,

taking into account expected losses in respect of the group’s exposure to credit, counterparty credit,

market and operational risks, and sets a minimum requirement for the amount of capital the group

must hold.

The increase in credit risk to £723 million in 2023 was due to a revised allocation of the group’s

treasury assets along with the consequences of including IW&I exposures.

At 31 December 2023, the group’s total risk exposure amount was £24256 million (2022: £16668

million). The increase was driven principally by the inclusion of IW&I exposures.

PILLAR 2A OWN FUNDS REQUIREMENT

The Pillar 2 requirement supplements the Pillar 1 minimum requirement with firm-specific Pillar 2A

requirements and a framework of regulatory capital buffers.

The Pillar 2A own funds requirement is set by the PRA as part of its supervisory review process and

the calculation of it remains confidential to the PRA. The requirement reflects those risks that are

specific to the firm that are not fully captured under the Pillar 1 own funds requirement. The

group-specific risks that are reflected in the Pillar 2A requirement are set out below:

PENSION OBLIGATION RISK

The potential for additional unplanned capital strain or costs that the group would incur in the event

of a significant deterioration in the funding position of the group’s defined benefit pension schemes.

See note 29 for further detail on the movement in the year to the net defined benefit pension asset.

INTEREST RATE RISK IN THE BANKING BOOK

The group operates on a non-trading book basis, whereby all assets held are with the intent of holding

to maturity. Assets are not actively traded in secondary markets for speculative purposes. The

resulting interest rate risk represents losses that could arise for a 2% parallel shift in the Bank of

England base rate. The exposure would measure the time to reprice interest bearing assets and

liabilities.

CONCENTRATION RISK

Greater potential exposure as a result of the concentration of borrowers located in the UK relative to

other overseas jurisdictions.

The group is also required to maintain a number of regulatory capital buffers, all of which must be

met with CET1 capital.

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45RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FINANCIAL POSITION CONTINUED

CAPITAL CONSERVATION BUFFER (CCB)

The CCB is a general buffer, designed to provide for losses in the event of a stress, and is set by the

PRA. The CCB is set at 25% of the group’s total risk exposure amount as at 31 December 2023.

COUNTERCYCLICAL CAPITAL BUFFER (CCYB)

The CCyB is designed to act as an incentive for banks to constrain credit growth in times of

heightened systemic risk. The value of the buffer is calculated as a percentage of the group’s total

riskexposure amount. For UK credit risk exposures, the percentage rate that applies is set by the

Financial Policy Committee (‘FPC’). For other jurisdictions where the group has exposures, the

percentage rate applicable to each jurisdiction is applied.

The percentage buffer rate for UK exposures is currently 20%. The group has relevant credit

exposures in other jurisdictions where a different rate applies, resulting in a weighted rate of

18%asat 31 December 2023.

CAPITAL MANAGEMENT

In managing the group’s regulatory capital position, we take into account:

— potential future volatility in pension scheme valuations that affect both the level of CET1 own

funds and the value of the Pillar 2A requirement for pension risk;

— expected additional increases in the UK countercyclical capital buffer rate; and

— the demands of acquisitions which would generate intangible assets and, therefore, directly

reduceCET1 resources; and

— expected and potential regulatory developments.

We keep these issues under review by forecasting capital and liquidity on a monthly basis, whilst

taking into account all known and anticipated macroeconomic and idiosyncratic changes.

The group’s Pillar 3 disclosures are published annually on our website (rathbones.com/investor-

relations/results-and-presentations) and provide further details about regulatory capital resources

and requirements.

TOTAL ASSETS

Total assets at 31 December 2023 were £42 billion (2022: £34 billion), of which £23 billion

(2022:£25 billion) represents the cash element of client portfolios that is held as a banking deposit.

RIM TREASURY ASSETS

As a licensed deposit taker, Rathbones Investment Management Limited holds our surplus liquidity

on its balance sheet together with clients’ cash. Cash in client portfolios held on a banking basis of

£23 billion (2022: £25 billion) (note 24) represented 47% of total Investment Management funds

under management and administration at 31 December 2023, compared to 53% at the end of 2022.

Cash held in client money accounts was £84 million (2022: £57 million). These balances are held off

balance sheet in accordance Client Money Rules of the FCA.

During the year, the share of treasury assets held with the Bank of England reduced to £10 billion

(2022: £14 billion), as investment in certificates of deposit and UK treasury bills increased in

accordance with our treasury policy and risk appetite as the environment of rising interest rates

presented greater opportunity for the management of our treasury assets.

The treasury department of Rathbones Investment Management, reporting through the banking

committee to the board, operates in accordance with procedures set out in a board-approved treasury

manual and monitors exposure to market, credit and liquidity risk as described in note 33 to the

financial statements. It invests in certain securities issued by a diversified range of highly-rated

counterparties. These counterparties must be single ‘A-' rated or higher by Fitch at the time of

investment and are regularly reviewed by the banking committee.

IW&I TREASURY ASSETS

The manner in which Investec Wealth & Investment Limited (a wholly owned subsidiary of

Rathbones Group Plc) holds its surplus client money is governed by the CASS rules. In this regard

these monies are off-balance sheet.

The IW&I Cash & Credit Management Committee (CCMC) is mandated by the Operations Committee

to consider, approve, and keep under review, the suitability of financial institutions for the placement

of firm’s and clients' cash deposits in accordance with the CASS rules on client money and assets.

Approved institutions are subject to the IW&I Credit Policy and annual due diligence which is

undertaken in accordance with the CASS rules. Total Client Money held was £13 billion as at

31December 2023 (2022: £19 billion) representing 31% of Investment Management funds

undermanagement at 31 December 2023 compared to 47% at the end of 2022.

Investec Wealth & Investment Limited also hold Firm's money, which is on balance sheet, also subject

to the IW&I Firms Credit Policy Statement and overseen by the CCMC. Total Firms Money held was

£1619 million as at the 31 December 2023 (2022: £2096 million)

The treasury department of Investec Wealth & Investment Limited are responsible for the cash

management of both the Client and Firm's money, reporting to the CCMC and operating in

accordance with the Treasury Mandate. Treasury monitor diversification and liquidity on a daily

basis. Approved Institutions, other than group companies, must have a minimum of S&P Short Term

rating of A-2, a S&P Long Term Rating of BBB+ and are reviewed quarterly by the CCMC.

LOANS TO CLIENTS

Loans are provided as a service to Wealth Management clients who have short to medium term cash

requirements. Such loans are normally made on a fully secured basis against portfolios held in our

nominee, with a requirement that the value of the loan is covered two times by the value of the

secured portfolio. Loans are usually advanced for five years (see note 16 to the financial statements).

In addition, charges may be taken on property held by the client to meet security cover requirements.

Our ability to provide such loans is a valuable additional service to clients who require bridging

finance when buying and selling their homes.

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46RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FINANCIAL POSITION CONTINUED

Loans advanced to clients decreased to £1017 million at end of 2023 (2022: £1597 million).

Asborrowing costs increased, we saw lower demand for new loans as clients looked to reduce

outstanding debt and finance their cash requirements from other means, including drawing down

from investment portfolios, leading to higher outflows of funds under management and

administration.

INTANGIBLE ASSETS

Intangible assets arise principally from acquired growth in funds under management and

administration relating to business combinations and are categorised as goodwill and client

relationships. Intangible assets reported on the balance sheet also include purchased and

developedsoftware.

At 31 December 2023, the total carrying value of goodwill and client relationship intangible assets

was £10105 million (2022: £3427 million). The significant increase in 2023 is principally the result

of the IW&I combination. In addition, other purchases of client relationship intangible assets of

£26million were capitalised during the year (2022: £10 million). £28 million of client relationship

intangible assets were disposed of in the year, predominately in relation to earn-outs which were paid

(2022: £26 million).

Client relationship intangible assets are amortised over the estimated life of the client relationship,

which is generally a period between 10 and 15 years. Should client relationships be lost, any related

intangible asset is derecognised in the relevant year. The total amortisation charge for client

relationships in 2023, including the impact of any lost relationships, was £224 million (2022:

£169million).The increase in the year was the result of amortisation for the IW&I client relationship

intangible asset during the final quarter following completion of the combination.

Goodwill, which arises from business combinations, is not amortised but is subject to a test for

impairment at least annually. No goodwill was identified as impaired during the year. Further detail

is provided in note 22 to the financial statements.

CAPITAL EXPENDITURE

Capital expenditure during 2023 amounted to £45 million (2022: £80 million).

Expenditure on the development of our systems that was capitalised amounted to £40 million in

theyear, a reduction of £18 million relative to the prior year. Whilst we have continued our digital

investment programme, the portion of this investment that represents development expenditure that

falls to be capitalised under accounting standards has reduced in line with our increasing adoption of

cloud-based, strategic technology solutions. The costs of cloud-based solutions are largely charged to

profit or loss at the time the cost is incurred, with the subsequent benefit of a reduction in the level of

depreciation cost in future years.

Property expenditure fell by £17 million in 2023. This reflected a pause in planned office

refurbishments as we considered our property strategy for the newly enlarged group as a result of

theIW&I combination.

DEFINED BENEFIT PENSION SCHEMES

We operate two defined benefit pension schemes. With effect from 30 June 2017, we closed both

schemes, ceasing all future benefit accrual and breaking the link to salary.

At 31 December 2023 the combined schemes’ liabilities, measured on an accounting basis, had

increased to £1011 million, up 68% from £947 million at the end of 2022. This increase primarily

reflected a reduction in discount rates at the end of the year, and a small decrease in the assumed

future rate of inflation. The reported position of the schemes as at 31 December 2023 was a surplus

of£70 million (2022: surplus of £94 million).

The funding position of the schemes improved during 2023, with increased gilt yields driving a

reduction in the schemes’ liabilities. As a result of this, the Company supported the Trustees’ decision

to switch the schemes’ assets into self-sufficiency credit funds in order to better secure the funding

position against future changes in bond yields and inflation expectations. This switch has further

lowered the level of gearing in the scheme’s assets and reduced the exposure to future margin calls.

The triennial funding valuations, with a valuation date of 31 December 2022 were undertaken

during the year by the scheme actuary. As for the previous valuations, a self-sufficiency funding basis

was used to calculate the schemes’ liabilities. The valuations were completed in August 2023 and

identified that the shortfall in the schemes’ funding position at 31 December 2022 was fully covered

by the £275 million deficit contribution made by the Company in August 2023. Therefore, no further

deficit funding plan was necessary and the Company is not required to make any further

contributions to the scheme at this time.

During 2023, the Company, working with the Trustees and the Scheme Actuary, undertook a review

of the feasibility of insuring the schemes’ liabilities via an insurance “buy in”. In December 2023, a

request for quotation was issued to a shortlist of insurers.

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47RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

LIQUIDITY AND CASH FLOW

As a bank, we are subject to the PRA’s ILAAP regime, which requires us to hold a suitable liquid assets

buffer to ensure that short-term liquidity requirements can be met under certain stressed scenarios.

Liquidity risks are actively managed on a daily basis and depend on operational and investment

transaction activity.

Cash and balances at central banks amounted to £10 billion at 31 December 2023 (2022: £14

billion). We continue to hold a substantial portion of the group’s overall liquidity with central banks.

The reduction during the year reflects increased investment in both debt securities issued by

high-quality counterparties, and central government issued short-dated treasury bills, which was

inresponse to the rising interest rate environment.

Cash and cash equivalents, as defined by accounting standards, includes cash, money market funds

and banking deposits, which had an original maturity of less than three months (see note 33 to the

financial statements). Consequently, cash flows, as reported in the financial statements, include the

impact of capital flows in treasury assets.

Net cash outflows from operating activities in the year largely reflect a £2514 million decrease in

banking client deposits (2022: £1819 million increase). Cash held in client portfolios reduced due to

portfolio asset allocation moving to alternative liquid assets, such as UK Government Treasury Bills,

due to the high interest rate environment. Loans and advances to banks and customers decreased

by£874 million in the year, this was partly attributable to the reclassification of a £145 million term

deposit (2022: £300 million) that is due to mature within three months of the year end into cash and

cash equivalents.

Cash used in investing activities included a net outflow of £2418 million from the purchase of

certificates of deposit (2022: net outflow of £2781 million), as we continued to reduce the proportion

of treasury assets held with the Bank of England in favour of UK Government short-dated Treasury

Bills and debt securities. All investment decisions were made under the existing low risk appetite

framework set by the RIM Banking Committee. Included within cash used in investing activities is

cash of £1726 million acquired from the acquisition of IW&I in the year.

The other significant non-operating cash flows during the year were as follows:

— outflows relating to the payment of dividends of £714 million (2022: £486 million);

— outflows relating to payments to acquire intangible assets of £56 million (2022: £88 million),

which includes payments in respect of investment managers under earn-out agreements, and

development of client applications;

— outflows of £51 million relating to capital expenditure on tangible property, plant and

equipment(2022: £43 million), which relates predominantly to property fit-out costs; and

inflowsof £29 million from a partial sale of the group’s shareholding in Euroclear.

TABLE 21. EXTRACTS FROM THE CONSOLIDATED STATEMENT OF CASH FLOWS

2023

£m

2022

£m

Cash and cash equivalents at the end of the year 1,302.9 15727

Net cash inflows from operating activities (86.4) 2929

Net change in cash and cash equivalents (269.8) (809)

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48RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS

SECTION 172 STATEMENT

Understanding the views and interests of our

stakeholders helps the group to make better

decisions with the aim of generating long-

term value for the company’s shareholders

whilst contributing to wider society by

building mutually beneﬁcial relationships

with our other key stakeholders.

Section 172 of the Companies Act 2006 requires

the directors to act in a way they consider will

promote the success of the company for the

benefit of its stakeholders as a whole. You can

read more about how we engage with and

respond to the interests and needs of our key

stakeholders and how the board engaged in 2023

on pages 49 to 57.

THE BOARD HAS DISCHARGED ITS

SECTION 172 DUTIES

The directors are briefed on their duties as

partofthe group’s induction programme and

each also has access to the group company

secretary for advice on the application of those

duties. Thedirectors’ awareness of their duties

tothe company, combined with the knowledge

and insights they obtain on the views and

interests of the group’s key stakeholders and

theimpact of the group on wider society,

enablesthem to make decisions that promote

long-term sustainable value for the company’s

shareholders.

In practice, the group operates within a corporate

governance framework whereby responsibility

for day-to-day decision-making is appropriately

delegated. In considering their duties under

section 172 when setting the group’s strategy,

values and framework of policies, the board aims

to ensure that the consideration of stakeholder

interests and the group’s long-term success is

embedded across its business. The board

recognises that the impact of each decision made

by it, and elsewhere in the group’s governance

framework, will be different for each of its key

stakeholders and understands the importance

ofconsidering the impact on each of those

stakeholders when making decisions.

The group’s board and committee paper

templates encourage paper authors to consider

and highlight the impact on the group’s

stakeholders of the matters covered. In addition

to acting as an aid to the board in discharging its

duties and facilitating focused debate, this is

intended to provide an additional layer of

comfort that paper authors have properly

considered and taken into account the interests

of stakeholders. Further details of how the board

considers each of the specific matters set out in

section 172 are set out in the following section,

along with some examples of how those

considerations have influenced decisions taken

by the board and group more widely.

CONSIDERING THE LONG TERM

The board sets the strategy, values and culture,

and develops and oversees the group’s

framework of governance, risk management

andinternal controls to promote and safeguard

the group’s long-term success. The strategic

goalsand objectives it sets are focused around

developing the group’s proposition and service to

fulfil the long-term needs of its clients. You can

read more about the group’s strategy on pages 22

to 26 of the strategic report. Details of how

stakeholder considerations influenced the

board’s decision-making regarding the strategy

can be found in the case study on page 51. The

group provides an essential service to its clients

in a highly regulated environment. The

identification, management and mitigation

ofrisks to the group’s business is key to

ensuringthe delivery of its strategy over the

longer term, and the consideration of risk plays

an important part in decision-making. You can

read more about how the group evaluates and

manages risk along with a description of the

principal and non-financial risks relating to the

company’s operations on pages 77 to 86 of

thestrategic report.

MAINTAINING A REPUTATION FOR HIGH

STANDARDS OF BUSINESS CONDUCT

The board supports the chief executive and the

group executive committee in embedding a

culture that encourages the group’s colleagues

tolive our values and help the group deliver on

its strategic objectives and purpose. The board

approves and oversees the group’s adherence to

policies that promote high standards of conduct

and receives regular updates on the group’s

culture through KPIs that form part of the chief

executive’s business performance update.

SHAREHOLDER MEETINGS

The AGM is scheduled to take place on 9 May

2024. Further details will be set out in the Notice

of AGM, which will be sent to shareholders in due

course. The board acknowledges the importance

of shareholders receiving presentations from the

board at the meeting and being able to ask

questions on the business of the AGM and the

performance of the group. The company will

provide a means for them to ask questions of the

directors. All voting at general meetings of the

company is conducted by way of a poll. All

shareholders have the opportunity to cast their

votes in respect of proposed resolutions by

proxy, either electronically or by post. Following

the AGM, the voting results for each resolution

are published and made available on the

company’s website.

S172 FACTOR MORE INFORMATION

The likely consequences of any decision

in the long term

Our strategic priorities: See page 22

Key board decision: See page 51

The interests of the group’s employees

Our strategic priorities: See page 22

Our people: See page 53

The need to foster business relationships

with the group’s suppliers, clients

and others

Our strategic priorities: See page 22

Creating value for our stakeholders:

See page 49

The impact of the group’s operations on

the community and the environment

Responsible business: See page 58

TCFD: See page 66

The desirability of the group maintaining

a reputation for high standards of

business conduct

Our culture and values: See page 20

Corporate governance: chair: See page 89

The need to act fairly as between the

company’s shareholders

Our strategic priorities: See page 22

Shareholders: See page 55

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49RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

OUR APPROACH TO

STAKEHOLDER ENGAGEMENT

Our aim is to maintain an open and transparent

approach to stakeholder engagement based on

building constructive relationships with our

keystakeholders and ensure there is a two-

waydialogue.

Across the firm, there are many examples of

stakeholder engagement influencing both

day-to-day actions and strategic initiatives. The key

strategic developments set out on pages 50 to 57

illustrate some of our significant stakeholder

considerations that informed the board’s

decision-making during the year and this approach

is designed to be consistent with our section 172

statement. Details of the framework through which

this is governed are set out in the table on

theright.

OUR STAKEHOLDER FRAMEWORK

The firm has identified the following key

stakeholder groups and by considering their

perspectives, insights and opinions, the board

seeks to ensure outcomes of operational,

investment or business decisions that are more

robust and sustainable.

In doing so our board has regard to the matters

set out in section 172, see page 49.

OUR REGULATORS

Rathbones group is regulated by all appropriate

regulatory bodies in line with our business lines

and activities. The group’s continued compliance

with its regulatory obligations and the interests

and views of the PRA and FCA are primary

considerations in decision-making across

thegroup.

OUR STAKEHOLDERS INPUT FROM OUR ENGAGEMENT WITH STAKEHOLDERS OUTPUT FROM ENGAGEMENT

CLIENTS

— Client engagement allows us to obtain feedback which

enables our proposition to evolve and meet the needs of

the client of the future

— Understand clients evolving priorities and requirements

— Client insight and feedback on service, technological

needs and products.

— Deliver bespoke and relevant products for the future

— Ensure ongoing high quality service

— Develop client centric propositions

— Support clients with intergenerational

wealthmanagement.

OUR PEOPLE

— Engagement helps us attract, retain and develop

our people

— Input into the sustainable employee model

— Understand the importance of DE&I and implement

changes across the firm’s network.

— Provide an inclusive and talented workforce

to service client needs

— Ensure continuing strong engagement with colleagues

— Offer a benefits package that supports our people

— Deliver relevant learning and development

programmes for all employees to ensure

ongoingsupport.

SHAREHOLDERS

— Engagement is designed to ensure confidence

in the long-term success of the firm

— Provide insight into the firm’s strategic

and investment direction.

— Ensure sustainable long-term shareholder returns

through our business model

— Maintenance of our progressive dividend policy

— Provide ongoing updates on the IW&I integration and

other strategic objectives

— Proposed new remuneration policy.

SOCIETY AND

COMMUNITIES

— We recognise our responsibility to wider society

and communities we operate within

— Obtain specific environmental and social perspectives.

— Implement and refine initiatives

aligned with our responsible business agenda

— Maintained our levels of community investment

— Engaged community partners

— Progress on our net zero programme.

PARTNERS AND

REGULATORS

— Engagement with regulators and our partners is

fundamental to the running of the firm and servicing

of clients

— Provide feedback to ensure ongoing collaboration

and anticipate any regulatory changes

— Engagement with our suppliers and partners supports

our ability to deliver our commitments.

— Respond to evolving regulatory requirements and

standards in order to maintain the firm’s high standards

— Ongoing engagement with all our regulators

— Work with our key suppliers to ensure ongoing

businessresilience.

OUR STAKEHOLDER FRAMEWORK

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

50RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

KEY BOARD DECISIONS AND CONSIDERATION OF STAKEHOLDER INTERESTS

RATHBONES’ COMBINATION WITH INVESTEC WEALTH & INVESTMENT UK (IW&I)

HOW THE BOARD REACHED ITS DECISION

During 2023, the board considered and agreed to

an all-share combination of Rathbones Group Plc

with IW&I.

The board was supported by the risk committee

and the firm’s second line of defence function on

various elements of the transaction including,

the potential market, legal, regulatory, capital

and operational risks. These risks were

mitigatedthrough extensive due diligence and

engagement with IW&I to ensure the interests

ofour stakeholders were protected throughout

thistransaction.

The transaction has brought two businesses with

closely aligned cultures andlong-standing

heritage in the UK wealth management together.

When the board was considering the Rathbones

and IW&I combination, it considered all aspects

of bothbusinesses including the long-term

implications on our strategic direction, day-to-

day operations and key stakeholders. The board

believe the combination with IW&I would

provide the following benefits to our stakeholders.

• Attract and retain the best industry

talent through a leading employee

proposition centred around

client service

• Secured future as an independent

wealth manager

• Career development opportunities

across a larger business with focus

on multi disciplines.

• Larger opportunity on which to base the

stewardship team’s investee engagement

• Increased opportunities for positive societal

impact, through our community partners

and employee giving programmes

• Maintain our net zero commitment including

engagement with companies, in which

we invest on behalf of our clients

RATHBONES

GROUP PLC

BOARD

CLIENTS

PARTNERS AND

REGULATORS

OUR PEOPLE

SHAREHOLDERS

SOCIETY AND

COMMUNITIES

• Enhanced and enriched client proposition across

investment management, ﬁnancial planning,

fund management and banking services

• Leverage the Rathbones investment in

technology to deliver optimal client experience

whilst improving operating eciency

• Ensure continued stability and continuity

of service with a competitive pricing model.

• Clear combined operating model,

leveraging strategic suppliers including

Investec Group, creating stronger

relationships with our suppliers

across our combined supply chain

• Maintain independent and

robust governance structures

across both ﬁrms

• Increased regulatory capital

surplus throughout the integration

• Increased engagement with

our regulatory partners.

• Increased scale and operational

eciency to support organic growth

• Maintaining the group’s independence

through the relationship agreement

and agreeing lock-in/ standstill

arrangements with Investec Bank Plc

• Growth opportunity from strategic

partnership with Investec Bank Plc

• Generate attractive ﬁnancial

returns via EPS growth over the

next three years.

WHY THIS COMBINATION?

CLIENTS

PARTNERS AND

REGULATORS

OUR PEOPLE

SHAREHOLDERS

SOCIETY AND

COMMUNITIES

RATHBONES

GROUP PLC

BOARD

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

51RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

CLIENTS

Clients are at the heart of our strategy and

their interests are a key consideration in

everything that we do.

STRATEGIC PRIORITY

HOW THE BOARD ENGAGED

The group executive committee and the board

regularly receive updates on client proposition,

investment performance outcomes and

servicelevels.

HOW THE FIRM ENGAGED

We engaged with our clients through a variety

ofdifferent methods including:

— focus groups and targeted surveys

— participated in the NMG Consulting 2023

client experience benchmark survey

— regular meetings held between investment

managers, financial planners and clients

— user experience testing of our digital solutions

and propositions

— virtual and in-person conferences held for

private clients, intermediaries and IFAs

— regular CEO letters and research notes issued

to clients to update them on the firm, the IW&I

transaction, integration process, and our

investment proposition.

KEY TOPICS RAISED

— Practical help on how to achieve their financial

goals, and invest in line with ‘responsible’ or

ESG values

— Help to navigate challenging times: inflation,

cost of living crisis and market volatility

— Frameworks and guidance to help make the

best financial decisions and ultimately achieve

good outcomes.

HOW THE FIRM RESPONDED

— Twelve financial awareness courses

heldvirtually

— Development of new products and services to

meet current and future client needs including

ESG proposition with Rathbones Preference

and the Rathbone Greenbank Global

Sustainable Bond fund

— Continued development of MyRathbones

withover 58% take up by clients

— Continued to develop our ability to deliver

ourproposition and client reporting digitally

— Additional financial planning capability to

support client needs in conjunction with

investment management services.

OUR SURVEY RESULTS

Amid significant political and economic

challenges in the UK leading to a market

downturn, our client satisfaction and likelihood

to recommend scores have increased from 2022.

Rathbones scores higher than average on brand

reputation, fit of products/services, and relative

value for money. Client feedback reveals

relationships with individual investment

managers are highly valued and contribute

heavily towards satisfaction. There are some

variances across client segments, with strength

in the relationship highest among older, tenured

clients with a segment of younger, newer clients

at greater risk of withdrawing funds (less familiar

with market and performance volatility).

Satisfaction with digital experience is high

which bodes well as more clients are demanding

more in the digital offerings. There is more work

to be done in effective client communications

and clarity of costs (fees and charges).

Enhancement to these areas will allow for a

greater client experience and addressing

Consumer Duty requirements.

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

Stakeholder interests and

engagement: See page 49

Enriching our proposition: See page 23

NET PROMOTER SCORE

1,2

Client likelihood to recommend Rathbones

(-100% to 100%)

Mean

OVERALL SATISFACTION

1,2

Overall satisfaction with Rathbones

(0 to 10)

8.9

8.3

8.5

Mean

8.2

8.3

8.4

SATISFACTION WITH THEIR

INVESTMENT MANAGER

1,2

Overall satisfaction with their primary

investment manager (0 to 10)

Mean

8.7

8.8

8.7 9.1

8.8

8.9

1. The mean is the average score of the eight firms who participated

in the 2023 NMG private client survey. It is also the average

from historic AON benchmark client surveys

2. Data excludes IW&I

Engaging with clients to support

product development

Engagement with our clients is through a

variety of studies and surveys. The

information gathered supports our planning

and communication. Information has been

gathered via:

— Financial Wellbeing Study 2023: to

understand the primary financial

wellbeing concerns facing high net worth

individuals

— Compeer Wealth Services for females,

digital demands and sustainable

investing: insight into the wants and

needs of clients from a digital and ESG

perspective

— NMG CSAT 2023: our deep dive survey

into Rathbones’ client satisfaction

— Savanta Brand Vue: painting a picture of

how the Rathbones’ brand is interpreted

by potential clients

— Compeer Wealth Services for

Accountants, Lawyers and HNWI:

investigating the wants and needs of

lawyers and accountants

— NMG IFA Distribution Study:

understanding the wants and needs of

IFAs and how do we serve them better

— Oxford Risk Financial Personality

Insights: a look into how the financial

personality of Rathbones ‘clients

compares to the Oxford Risk benchmark.

We act collaboratively: See page 6

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

52RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

OUR PEOPLE

Engagement as a driver for

change

Our colleague engagement survey is a

primary driver for understanding and

improving how we experience work at

Rathbones. Throughout the year, we

encourage our colleagues to give their

anonymous feedback on what it’s like to

work at Rathbones through our colleague

engagement survey. Aggregated group

results are shared across the firm with notes

on areas of strength and focus for

improvement. In response, leaders and

managers commit to action planning at

strategic and local levels to actively respond

to colleague feedback. Our colleague

engagement survey is a key tool for

informing and delivering our people

strategy; and by asking, listening, and taking

action, we can make sure Rathbones

continues to respond to colleagues and

becomes an even greater place to work.

Our people: See page 61

Understanding the needs of the group’s

people is essential in developing a

workplace and culture in which they can

reach their full potential and, in turn,

ensure the long-term success of the group.

STRATEGIC PRIORITY

HOW THE BOARD ENGAGED

The board receives feedback from employees

through several channels. Regular reports are

tabled by our chief people officer (CPO) covering

matters ranging from employee sentiment to

DE&I, with reports based on extensive KPIs.

Feedback is also received through our non-

executive director workforce engagement

programme led by Iain Cummings and Dharmash

Mistry. Read more about the key themes from this

initiative on the next page. The views of

colleagues are also obtained via regular colleague

surveys. Detailed results are shared with the

group executive committee, with key themes and

issues escalated to the board for consideration.

HOW THE FIRM ENGAGED

We engaged with our people through the

following activities:

— day-to-day interaction through our

management structures coordinated and

supported by a dedicated function under

ourCPO

— regular colleague opinion surveys to measure

engagement, wellbeing and opinions, this was

rolled out to IW&I in Q4

— ongoing and regular virtual management

briefings, over 2000 colleagues attended

jointbusiness function town halls in Q4

— webcast, internal magazine and

managementblogs

— virtual presentations by the executive team to

discuss performance and the firm’s progress

on the strategic plan

— peer recognition scheme to identify colleagues

who demonstrated outstanding behaviours

and conduct aligned to our values

— workforce engagement sessions held with the

non-executive directors.

KEY TOPICS RAISED

— What will the impact and opportunities should

our people expect following the IW&I

combination?

— How does the firm’s people strategy help our

colleagues develop their careers?

— What does the future working style at

Rathbones look like and how will our culture

evolve following the IW&I transaction?

— The continued importance of diversity

equality and inclusion (DE&I).

HOW THE FIRM RESPONDED

— Frequent engagement on the combination

process and integration plans to support clear

communication and regular engagement

opportunities to raise questions

— Introduced joint MS Teams capability as a key

collaboration tool between the businesses

— Announced new senior leadership

appointments and team structures that will

bring our teams together

— Continued work to develop our recruitment

processes as part of our commitment to

attract, cultivate and retain diverse talent

— Involved all leaders and teams in the cascade

of our strategy

— Focusing on developing our people and

enabling our culture

— Roll out of our DE&I strategy across the firm.

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

EMPLOYEE RESPONSE RATE

76%

2022: 82%

OVERALL ENGAGEMENT

8.0/10

2023 Benchmark

: 7.9

2022: 8.0 (benchmark 7.8)

EMPLOYEE NET PROMOTER SCORE

Employee likelihood to recommend Rathbones

2023 Benchmark

: 26

2022: 39 (benchmark 22)

I FEEL WELL COMMUNICATED WITH

7.7/ 1 0

2023 Benchmark

: 7.6

2022: 7.8 (benchmark 7.6)

MY MANAGER CARES ABOUT ME AS A PERSON

8.7/10

2023 Benchmark

: 8.6

2022: 8.5 (benchmark 8.6)

1. Benchmarks are set by Peakon and relate to the broader

financial service sector clients

2. Data excludes IW&I

Responsible business review: See page 58

Culture: See page 20

Gender pay gap report

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

53RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

COMBINATION WITH IW&I

— Positive reaction received from colleagues

on the combination with IW&I due to the

benefits it can bring to the group

— Anticipated improvements to service

delivery to clients as well as increased

opportunity for learning and development

— Awareness that the combination may

bring uncertainty and possible instability

in the short term to colleagues. The board

need to monitor and mitigate this risk

with ongoing communications during the

integration.

CULTURE

— Our people continue to believe the group’s

culture and values remains a key strength

which should be retained whilst

recognising the need to embrace IW&I

into the group

— Strong employee engagement score of 8

out of 10, indicates high levels of

satisfaction in working at Rathbones with

loyalty scores above industry average

— Whilst hybrid working has empowered

colleagues, it should not be at the expense

of the next generation of wealth managers.

ON DIVERSITY, EQUALITY &

INCLUSION (DE&I):

— Recognition that the group had made

good progress on DE&I as both our

Women In Finance and board

representation targets had been achieved

— DE&I networks had been created across

the country which were contributing to

the group’s progress

— Additional resource had been introduced

to help drive change and embrace the

differences in our people

— The nomination committee monitors

progress against key milestones of the

strategy to ensure we maintain

momentum in this critical area.

KEY THEMES IN 2023 CENTRED AROUND THE FOLLOWING AREAS:

Iain Cummings and Dharmash Mistry are

ourtwo designated non-executive directors

responsible for gathering employee feedback.

Aworkforce engagement framework was

developed using existing employee engagement

activities already in place to provide a range of

opportunities to engage directly with employees

and receive feedback. The two-way dialogue

between the board and employees is facilitated

by a combination of engagement methods,

which in normal circumstances would include

face-to-face meetings, office visits and

attendance at employee events. These tools

complement the established annual all-

employee survey process and the board’s review

of findings. The adoption of a diverse range of

listening channels has been based on the

principle that everyone in the firm should have a

voice and is consistent with employee feedback

of the benefit of multiple platforms to raise areas

for discussion. In turn, it supports the board in

gathering a fair and representative view of the

issues that are important to employees and

builds an appreciation of how these may differ

by role and geography. Engagements can be

classed as formal and informal, with both

required to identify ongoing themes. Typically,

the formal approach is used to gather a

structured and holistic view across a large

population of individuals at a point in time.

Theboard’s informal methods provide a greater

depth of feedback, truer understanding of

underlying sentiment and support the

development of constructive relationships

withemployees.

OUR WORKFORCE PROGRAMME

DURING 2023

EMPLOYEE ENGAGEMENT SURVEYS

(FACILITATED EXTERNALLY)

BOARD BRANCH VISITS

NED DROPIN SESSIONS ACROSS VARIOUS

OFFICES

CEO MEETINGS WITH

FRONT OFFICE TEAMS

TOWN HALLS HELD

Key board decision: See page 51

Our people: See page 61

Responsible business update: See page 58

Gender pay gap report

1. Data excludes IW&I

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

OUR APPROACH TO WORKFORCE ENGAGEMENT WITH THE BOARD

I felt the session was really well

set up, if we had longer I am sure

we would have kept going.”

Iain and Dharmash were very

good at ensuring everyone had a

chance to speak.”

This is another example of the

‘openness’ of our organisation

which makes it good to work for”

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

54RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

SHAREHOLDERS

Understanding the views of our

shareholders is essential to us delivering

long-term sustainable ﬁnancial returns.

STRATEGIC PRIORITY

HOW THE BOARD ENGAGED

Information on how we engage with our

shareholders and how the board is made aware

of shareholder sentiment and interests can be

found below. The views and interests of the

company’s shareholders are key considerations

when the board determines the level of dividend

payments, and when setting the group’s strategy

and business priorities.

HOW THE FIRM ENGAGED

We engaged with our shareholders through the

following activities:

— executives, our board chair and committee

chairs held meetings with and gathered

feedback from our investors, both directly, via

our corporate brokers and through various

conferences

— we continued to expand sell-side analyst

research coverage of the company

— we commissioned an independent analyst

perception study, to gain insight into our

shareholder/investor’s opinions. The results

were presented to the board

— our AGM provided the opportunity for all

shareholders to ask questions of our board.

KEY TOPICS RAISED

— How will the company deliver on the

combination with IW&I?

— How will the new remuneration policy

supportdelivery of the strategic objectives?

— How is the integration of Saunderson House

progressing?

— How will the company improve

organicgrowth?

— What is the progress update on client

lifecyclemanagement (CLM) in terms of

budget and benefits?

HOW THE FIRM RESPONDED

— Discussed the IW&I transaction and associated

benefits with our top shareholders

— Presented the proposed new remuneration

policy to shareholders ahead of the AGM vote

and received support for the proposal

— Provided regular updates on the company’s

financial and strategic performance, through

our quarterly market updates and half-yearly

results presentations

— Updated the market on strategic progress as

part of result statements throughout the year

— Responded to several environmental, social

and governance (ESG)-related questionnaires

during the year and issued our Task Force on

Climate-related Financial Disclosures (TCFD)

report and responsible business report

— Restated our commitment to our progressive

dividend policy which was maintained

throughout the year

— Maintained meaningful dialogue with the

sell-side analyst community.

NUMBER OF INVESTOR MEETINGS HELD IN 2023

110

NUMBER OF NEW INVESTORS IN 2023

107

1. Calculation methodology was changed for number of

meetings in 2023, with one group meeting counted as one

rather than reflecting the number of investors who attended

2. Number of new investors includes both retail shareholders

and institutional investors

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

Stakeholder interests and engagement:

See page 49

Group chief executive ocer’s review:

See page 11

Enriching our proposition: See page 23

Engagement on the Investec

Wealth & Investment (IW&I)

combination

In April 2023 we announced the

combination with IW&I that not only

presents a compelling strategic and financial

rationale, but also secures our future as the

UK’s leading discretionary wealth manager.

We met with all of our top shareholders to

discuss the transaction and throughout the

year we have continued to update investors

and the wider market on our progress. We

were grateful for the overwhelming support

for the combination, which was a positive

affirmation of this transformational

transaction.

In addition to engaging with our

shareholders we discussed the transaction

with our broader stakeholder base. More

information can be found in our IW&I

casestudy.

Key board decision: See page 51

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

55RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

SOCIETY AND COMMUNITIES

We are conscious of the impact of the

group’s operations on the community

and environment and understand the

importance of being a good

corporate citizen.

STRATEGIC PRIORITY

1 2

HOW THE BOARD ENGAGED

The group’s responsible business programme,

which is sponsored by the chief executive, has

continued to deliver on commitments that were

made in 2021 relating to responsible investment,

our people, society and communities and the

environment. You can read more about our

responsible business programme on pages 58 to

65, our Task Force on Climate- related Financial

Disclosure (TCFD) report and responsible

business progress update. Details of how

consideration of our wider community has

shaped some of our recent initiatives can be

found on page 63.

HOW THE FIRM ENGAGED

We engaged with society and the communities

in which we operate through the following

activities:

— we encouraged high standards of governance

as an investment manager and frequently

engaged with companies on environmental,

societal, and corporate governance concerns

— used our community investment network to

support discussion around regional charity

projects and employee matching

— worked with industry bodies to understand

and respond to the growing stakeholder

expectation around management of climate

risk and emissions exposure.

KEY TOPICS RAISED

— How has the firm responded to donation

appeals across the world?

— How do we consider our climate strategy and

the environmental impact of our operations?

— How do we best support the communities in

which we operate?

HOW THE FIRM RESPONDED

— We successfully coordinated donation

appealsto support the disasters emergency

committee’s response to the crisis in Syria

andTurkey

— We supported the communities in which

weoperate through the Rathbones Group

Foundation, corporate donations and

employee volunteering. In 2023, we gave

morethan £589000 (2022: £795000)

— Restructured our community investment

structure in response to integration

— Expanded our stewardship team to support

our engagement activities

— Reviewed our approach to reporting on

climate risk. See our TCFD report for more

information

— Published our fossil fuel statement and

thermal coal position policy.

Responsible business review:

See page 58

Responsible investment report

Responsible business update

CARBON DISCLOSURE PROJECT (CDP) SCORE

DIRECT ENGAGEMENT WITH INVESTEE

COMPANIES

705

671

752

TOTAL AMOUNT DONATED

£418,000

£795,000

£589,000

1. Data excludes IW&I

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

Reviewing our responsible

business strategy

Having set our responsible business (RB)

strategy three years ago, in 2023 we

initiated a review. Following a review of

incoming regulation and reporting

frameworks from Sustainability Disclosure

Requirement to the International

Sustainability Standards Board expectations

an issue matrix was drawn up, which we

then tested with our stakeholders. Through

workshops with our colleagues, questions in

a client survey, reviewing regulatory

thematic updates and conversations with

external SMEs we drew out those topics that

appeared most material to Rathbones.

Whilst this work was due to be completed in

2023, following the IW&I announcement,

the decision was made to extend our

engagement to ensure outcomes were

suitable for the enlarged group. Work will

therefore continue through 2024, and an

updated RB strategy will be published in

our2024 annual and responsible

businessreports.

Responsible business: See page 58

STRATEGIC

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GOVERNANCE

REPORT

FURTHER

INFORMATION

56RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CREATING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS CONTINUED

PARTNERS AND REGULATORS

Engagement with our regulators and

partners is fundamental to the running

of the ﬁrm and servicing our clients.

STRATEGIC PRIORITY

HOW THE BOARD ENGAGED

The board is regularly briefed on regulatory

developments and expectations, and the board’s

risk, audit and remuneration committees receive

detailed insights into specific areas such as the

Internal Capital Adequacy Assessment Process

(ICAAP) and Internal Capital and Risk

Assessment (ICARA), Client Assets Sourcebook

(CASS), Regulatory Activity (COBS, SYSC, DISP,

SMCR) as well as managing FCA regulation

including Consumer Duty and the Sustainable

Disclosure Requirements. The board also

receives updates in relation to specific matters,

such as areas of interest to the FCA/ PRA

including operational resilience, conduct risk

and the management of culture. The group

maintains regular contact with the PRA and FCA

to ensure awareness of its concerns, expectations

and agenda, and this informs the prioritisation of

activities within the group’s annual operating

plan. The board discussed the November Dear

CEO letter laying out its expectations for wealth

and stockbroking firms.

HOW THE FIRM ENGAGED

We engaged with our partners and regulators

through the following activities:

— we held regular meetings with our regulators

during the year and continue to have a

proactive and transparent relationship with

them. The number of meetings increased in

2023 given the IW&I transaction

— we engaged with our suppliers to understand

both their exposure to environmental, social

and governance (ESG) risk (including modern

slavery risk) and their management of these

matters. Our modern slavery statement is

updated annually and reviewed by our board

— we maintained ongoing relations with our key

suppliers and partners during the year with

the board receiving regular updates on

engagement with our existing partners.

KEY TOPICS RAISED

— How the planned combination of Rathbones

with IW&I would create value for stakeholders

— Rathbones response to Consumer Duty

regulation

— How do Rathbones ensure open and clear

dialogue with regulators with timely response

to requests?

— Do we provide fair and transparent terms with

our suppliers?

HOW THE FIRM RESPONDED

— All responses to regulators have been made

within the agreed deadline

— Trained our board on key topics. See page 97

in our governance section for more on board

training

— Worked in close collaboration with the firm’s

regulators, including through the transaction

period relating to IW&I

% OF SUPPLIERS PAID WITHIN 30 DAYS

94%

96%

95%

% OF PAYMENTS MADE TO SUPPLIERS

IN AGREED TIMEFRAME

70%

92%

94%

1. Data excludes IW&I

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

— Maintained a constructive relationship

withHMRC

— Reviewed our preferred, strategic and critical

suppliers for their ESG policies and processes.

See more on page 63

— Interacted with the industry bodies and

associations we are affiliated with to ensure

we were engaged with issues impacting

ourindustry

— Engaged with our existing lending partner

— Adhered to payment terms with suppliers.

Stakeholder interests and engagement:

See page 49

Risk management and control:

See page 77

Engaging with our suppliers

Rathbones’ supplier management team has

enhanced the process for on-boarding a new

supplier, renewing and existing supplier and

adding additional services to an existing

supplier in Q22023.

The process now includes an assessment

ofthe supplier’s responsible business and

ethical practices via the Rathbones’ ESG

questionnaire completed by the supplier

and reviewed to ensure it is in line with

Rathbones’ standards.

In 2023, work was undertaken to identify

supplier partners that work with both

Rathbones and IW&I. In 2024, work

willbegin on the integration of our

supplychains.

Responsible business: See page 63

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57RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR APPROACH TO RESPONSIBLE BUSINESS

Our purpose is to think, act and invest

for everyone’s tomorrow

RESPONSIBLE INVESTMENT

We will apply an active and thoughtful

approach to responsible investment

OUR ENVIRONMENTAL IMPACT

We will play our part in the move

to a net zero economy

OUR PEOPLE

We will work to become

the employer of choice for the

wealth management sector

SOCIETY AND COMMUNITY

We aim to be a trusted partner in

the societies in which we operate

OUR PILLARS ARE UNDERPINNED

BY OUR CRITICAL FOUNDATIONS

Robust

governance

Positive

corporate culture

Identified

material issues

AND ACTIONED THROUGH

Risk and opportunity

informed targets and actions

SDG aligned

outcome metrics

Executive non-financial

strategy linked remuneration

RESPONSIBLE BUSINESS REVIEW

OUR RESPONSIBLE BUSINESS FRAMEWORK

Our responsible business approach is delivered

through our four-pillar programme. We work

with a number of partners, recognising that

collaboration will help drive the change we want

to see.

AMBITION AND IMPACT

We believe that our focus on the long term

enables us to build value for our clients, whilst

making a wider contribution to society. We are

committed to investing for everyone’s tomorrow.

This means understanding the environmental,

social and governance (ESG) issues that matter

to both our stakeholders and to our business, and

looking beyond the short term for the most

sustainable outcome.

ROBUST GOVERNANCE

Our commitment to operating in a way that

creates long-term value for our stakeholders

includes putting in place strong governance

foundations to hold ourselves to account.

Alongside clear accountability we set targets,

track and monitor our progress and report on our

commitments in a transparent and timely

manner. Our responsible business programme

enables us to deliver on our purpose through our

various initiatives, including our responsible

investment approach, DE&I, community

investment and reducing the environmental

impact of our operations, both direct and

through the investments we make on behalf of

our clients.

COLLABORATION

We know that we cannot deliver the level of

change needed to impact the world’s most

pressing environmental, social and governance

issues on our own. Therefore, we have joined

forces and operate in alignment with selected

recognised frameworks and initiatives.

These engagements alongside our work with

regulators and delivery partners support our

understanding of stakeholder expectations and

best practice response opportunities. A selection

of our affiliations and partnerships can be seen

on our website, including our continued support

for the United Nations Global Compact.

HIGHLIGHTS

In 2023, our responsible business committee,

co-chaired by our group chief executive and the

managing director of our investment business,

discussed matters ranging from incoming

regulatory requirements such as the

Sustainability Disclosure Requirements, to the

increasing ESG reporting requirements

introduced by frameworks such as those

published by the International Sustainability

Standards Board and the final Taskforce on

Nature-related Financial Disclosures framework.

The committee received updates on initiatives

across our four pillars, including:

— progress towards our net zero commitment

— our stewardship activities

— our DE&I programme, including our gender

pay gap

— continued engagement with suppliers and our

modern slavery statement

— the changing shape of our community

investment programme

— an update on the quality of carbon offsets

following a review undertaken by Climate

Impact Partners.

LOOKING FORWARD

In 2023, we undertook a high-level materiality

analysis. The outcomes will be used in 2024 to

support a review of our responsible business

strategy and approach and its associated

governance. The new strategy will reflect the

broader group including IW&I.

OUR

PILLARS

Responsible business update Partnership and memberships

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58RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

RESPONSIBLE BUSINESS REVIEW CONTINUED

OUR RESPONSIBLE BUSINESS PROGRESS

PILLAR

AND ISSUE

AREAS OF FOCUS 2023 PROGRESS

FURTHER

INFORMATION

RESPONSIBLE

INVESTMENT

ESG integration Published the group fossil fuel statement and thermal coal phase out plan, which

will support management of the carbon intensity of the investments we make on

behalf of our clients

Read more: See page 64

Responsible business update

Resource consumption

19 sites (out of 33) using renewable electricity, which covers 64% of our total

consumption (kWh)

Funds under management and administration (FUMA)

aligned with science-based targets

30% of Rathbones FUMA (excluding IW&I) has committed to set or has set their

own Science Based Targets initiative aligned targets. The group remains on track to

meet our 2025 near-term target of 35%

Carbon intensity Scope 1 and 2 – location-based emissions

(tCOe/FUMA £bn)

129 (down 11pp from 138 in 2022)

1. Our 2023 responsible business data excludes IW&I. Integration will take place through 2024 to support consolidated reporting for year end 2024

2. Environmental data includes IW&I. Totals have been recalculated and restated for the past three years

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59RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

RESPONSIBLE BUSINESS REVIEW CONTINUED

RESPONSIBLE INVESTMENT

OUR APPROACH

We recognise that the environment, society and

financial stability are connected. It is therefore

our responsibility to incorporate environment,

social and governance (ESG) factors and the

effect they can have on our clients’ portfolio

returns into our investment and ownership

decisions. By embedding the analysis of ESG

factors into our investment process, we strive to

understand ESG risks and identify high-quality

investments with attractive financial

characteristics that can deliver on clients’

long-term investment objectives. We also

recognise the benefits that society can reap from

our ability to potentially identify long-term

sustainable investments for our clients.

With the support of our specialist financial, ESG

integration and stewardship analysts and input

from third-party data providers, we consider the

following factors:

— environmental: we examine the challenges

and opportunities faced by companies

because of the impact of climate change on

resource management, new regulations, and

other environmental challenges

— social: we assess the legal and reputational

risks faced by companies to ensure they have

adequate policies and procedures to deal with

issues such as employee relations, community

impacts and human rights risks

— governance: we review factors that highlight

the quality and robustness of a company’s

internal structure and practices for issues such

as executive pay, board composition and audit,

as well as business ethics.

Our analysis considers relevant sustainability

frameworks and includes data sourced from at

least three ESG data providers.

Following a review, our responsible investment

(RI) policy has been updated to better reflect

group application of our RI principles. This both

ensures clarity of our overarching framework

whilst supporting application at a business unit

level that makes most sense for our clients.

Governance of the policy was also reviewed and

where applicable committee structure,

membership and terms of reference have been

updated. Our updated RI policy is available on

our website.

ESG INTEGRATION

In 2023, we refined our investment process to

include a sustainability alignment lens into our

investment analysis - broadly, how a company’s

intentions translate into real outcomes. The

approval of our fossil fuel positioning statement

and thermal coal phase out plan, supports

delivery on our net zero commitments. The

publication of our phase-out plan aligns with the

validation of our near-term net zero targets by

the Science Based Targets initiative at the end of

2022, which asks that investment in thermal

coal ceases by 2030.

ENGAGEMENT

We engage with the companies in which we

invest on behalf of our clients, prioritising

engagement where we can help make a

difference in addressing systemic ESG

challenges. We are prepared to escalate our

engagement activity or reduce our holdings in

companies that continue to present an ESG risk

over time. All engagement activity is covered by

our RI policy, and supported by our engagement

policy. In 2023, we undertook 752 engagements

(2022: 671).

VOTING

We actively vote in a manner that allows us to

focus our resources where we believe we can

make the most difference. This may involve

voting against management to help drive

positive change. In 2023, we voted on 11966

resolutions at 853 company meetings (2022:

13071 resolutions at 1013 company meetings).

In 2023, we undertook a regular review of our

voting process in 2023 to ensure we maximise

our impact across all voting channels. This

process will be reviewed again as part of the

integration process with IW&I. Our aim is to both

maximise the percentage of holdings we vote on,

whilst ensuring our votes are impactful.

TRANSPARENCY

We are committed to being transparent about

our approach to RI, ensuring that commitments

or promises we make can be substantiated with

clear evidence of action. Relevant committees

receive regular updates on investments which

may breach the thresholds we have established.

We have established an RI communications

coordination group and are reviewing and

updating collateral and approaches to support

both our Green Claims Code review process and

Consumer Dutyconsiderations. Our approach is

recognised with our PRI Score improving in

many areas from 2022, see more in our RI report.

HIGHLIGHTS

PRI: POLICY GOVERNANCE AND

STRATEGY SCORE

77%

2022: 72%

4 of 5

2022: 4 out of 5 stars

DIRECT ENGAGEMENTS

752

2022: 671

VOTES MADE AGAINST MANAGEMENT

786

2022: 971

Further information is available in our:

Responsible investment report

Engagement report

Stewardship code report

1. Data excludes IW&I

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60RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

OUR APPROACH

We are a people business, so it is imperative that

our strategy sets a culture that drives

performance and builds long, rewarding careers

for our colleagues. Based around a common set

of corporate values and a commitment to DE&I,

we are focused on leveraging the talent in our

business, as we develop more career paths, build

leadership skills and manage succession.

Our management team and the board continued

to engage with our people through a variety of

channels, ensuring open discussion across our

workforce. A key highlight of the year was our

employee engagement survey, with 76%

response rate (82% in 2022) and an employee

net promoter score of 37 (39 in 2022) which is

above the sector average of 26 (22 in 2022). In

2023, we shared our updated people plan.

CULTURE AND VALUES

Our people strategy was finalised and is being

used by our people business partners with their

stakeholders to frame next steps to support our

strategic ambition of ‘inspiring our culture’.

Through our integration we maintain our

commitment to colleagues across both

businesses to craft an inclusive culture. Read

more about our culture on pages 20.

EMPLOYEE WELLBEING

At Rathbones we care about colleague wellbeing.

We have a range of provisions in place to support

the mental and physical health of our people. In

2023, we continued to offer access to our

employee assistance programme, including a

free and confidential phone and online advice

service. Alongside these services our wellbeing

team and inclusion networks have run

awareness sessions on several topics, from

cancer and menopause awareness to mental

health and neurodiversity.

We introduced a socio-economic diversity

network and continued to track our employees’

opinion through our employee surveys. In 2024,

we will be working with our new IW&I

colleagues to ensure we have representatives

from across the group.

LEARNING AND DEVELOPMENT

We are committed to investing in the learning

and development of all employees. We continue

to support participation in appropriate internal

or external programmes. We seek to give all our

people the opportunity to develop the skills,

knowledge and behaviours they require to fulfil

their current roles effectively, supporting them

in realising their potential and enjoying a varied

and engaging career. In 2023, we rolled out

programmes focused on the four pillars of

Consumer Duty and ran awareness sessions on

compliance with the Green Consumer Code. Our

sessions on cyber security and our mentoring

scheme continued to run. Our 2023, training

spend per employee was £529 (2022: £456).

DIVERSITY, EQUALITY AND INCLUSION

At Rathbones, we know that everyone walks a

different path in life. From where we grew up to

the languages we speak, how we think and who

we love – we are all different. By embracing our

different experiences and perspectives we are

working to create and protect an environment

that is inclusive and equal for everyone. With

more than 3500 people across 23 offices we

recognise that embracing our differences helps

us make better decisions and bring innovation

into everything we do. Embedding DE&I across

the group is critical to achieving our strategic

ambitions and our purpose of investing for

everyone’s tomorrow. Having shared our DE&I

plan in 2022, we tracked progress against our

targets and gathered feedback in our

engagement surveys as well as insights from

colleagues across the group gathered via our

inclusion networks.

RESPONSIBLE BUSINESS REVIEW CONTINUED

OUR PEOPLE

HIGHLIGHTS

EMPLOYEE ENGAGEMENT SCORE

8.0

Benchmark: 7.9

(2022: 8.0 / benchmark 7.8)

% OF EMPLOYEES PARTICIPATING

IN SHARE SCHEMES (SIP/SAYE)

84% / 56%

(2022: 90% / 63%)

% OF EMPLOYEES SHARING DIVERSITY DATA

63%

(2022: 64.9%)

EMPLOYEE TURNOVER

7. 59 %

(2022: 7.2%)

1. Data excludes IW&I

Measuring our diversity

Success Factors, the platform we ask

employees to self-report their demographic

data, covers many of the Equality Act 2010

protected characteristics.

It’s a secure system with the necessary

governance and controls to store

confidential personal data. The data is

accessible to a limited number of HR

colleagues.

The data extracted from Success Factor

willalways be aggregated, anonymised,

with groups of less than 10 not being

reported on.All demographic questions

have beenmodelled from what is

consideredbestpractice, e.g.: “Is your

genderidentity the same as at birth?” or

“What was the main household earner

occupation when aged 14?”.

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61RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

RESPONSIBLE BUSINESS REVIEW CONTINUED

OUR PEOPLE CONTINUED

To support this 63% of employees (649% in

2022) have shared their diversity data with us.

This decrease may be driven by the move to a

new system to collect data which introduced

more categories of diversity data.

BOARD DIVERSITY

At the end of 2023, our board had five female

directors out of nine, which meant we met the

commitment of 33% female board

representation for FTSE 350 companies. We

alsohad three females on our group executive

committee (GEC). In 2023, we continued to meet

the requirements of the Parker Review, which

encourages the improvement of ethnic and

cultural diversity on boards. We see this as a

good foundation on which to build, but not an

end point. We are signatories to the Women in

Finance Charter and as of September 2023 we

reached 265% female representation in senior

management compared to 156% female

representation in 2018. Reporting against

compliance requirements can be found in the

tables to the right.

GENDER PAY GAP

We are committed to equality and inclusion.

Addressing our gender pay gap is a key

component of achieving this. To read more on

our approach, please see our gender pay gap

report on our website.

GENDER DIVERSITY

AT 31 DECEMBER 2023

Number

of board

members

Percentage

of the board

Number of

senior positions

on the board

(CEO, CFO, SID

and Chair)

Number

in executive

management

Percentage

in executive

management

Total number

of employees

Percentage

of total

employees

Men

2022 4 57% 5 7 70% 1175 54%

2023 4 44% 7 8 67% 1,236 54%

Women

2022 3 43% 2 3 30% 995 46%

2023 5 56% 2 4 33% 1,049 46%

Other categories

2022 − − − − − − −

2023 − − − − − − −

Not specified/prefer not to say

2022 − − − − − − −

2023 − − − − − − −

1. Data excludes IW&I

ETHNIC DIVERSITY

AT 31 DECEMBER 2023

Number

of board

members

Percentage

of the board

Number of

senior positions

on the board

(CEO, CFO, SID

and Chair)

Number

in executive

management

Percentage

in executive

management

Total number

of employees

Percentage

of total

employees

White British or other White

(including minority white groups)

2022 6 86% 4 8 80% − −

2023 8 89% 4 9 75% 1,267 54.45%

Mixed/Multiple Ethnic Groups

2022 − − − − − − −

2023 − − − − − 22 0.96%

Asian/Asian British

2022 1 14% − − − − −

2023 1 11% − − − 98 4.29%

Black/African/Caribbean/

Black British

2022 − − − − − − −

2023 − − − − − 32 1.40%

Other ethnic group, including Arab

2022 − − − − − − −

2023 − − − − − 22 0.96%

Not specified/prefer not to say

2022 − − − 2 20% − −

2023 − − − 3 25% 844 36.94%

Inspiring our people

Read more: See page 54

Our responsible

business update

Our gender

pay gap report

Further information can be found

in this report and on our website:

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62RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

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SOCIETY AND COMMUNITIES

OUR APPROACH

Through our business we aim to add value not

only to our clients but also to the societies and

communities in which we operate. We work with

regulators, partners, suppliers and communities

to understand their aims and ambitions working

to align our approach to best practice across our

programmes.

HUMAN RIGHTS

Rathbones is pleased to continue to support the

United Nations Global Compact (UNGC). This

commitment aligns with our support for the

International Labour Organization’s standards

and the Universal Declaration of Human Rights.

As a business we will not tolerate child or forced

labour, be it through our operations or the

investments we make. Aligning with our

commitment to decent work and economic

growth, we support the right to freedom of

association and collective bargaining.

ESG INTEGRATION WITH SUPPLIERS

As a UK-based financial services business,

Rathbones has a relatively low human rights risk

within its direct supply chain. Indirect suppliers

further down our supply chain however,

potentially present an elevated risk. In 2023, we

reviewed and updated our supplier maturity

roadmap, including a revision of our ESG

questionnaire. The roadmap outlines our next

steps, including increased business level

management information and a greater focus on

procurement/on-boarding support from the

central team. With 76% of suppliers (equating to

70% of Rathbones third-party spend) having

completed our ESG review, we could see the

main areas of concern raised through the

responses being; modern slavery statements,

living wage compliance (where our smaller

supplier partners response may be limited by

their size) and net zero approaches supported by

near-term targets and data disclosure in our

larger partners.

MODERN SLAVERY

Following the completion of the IW&I

transaction we reviewed our modern slavery

statement to consider alignment and support the

mapping of our expanded supplier universe. Our

updated statement will be approved by our board

and released in May 2024. It will be available on

our website.

ANTIBRIBERY AND CORRUPTION

Rathbones has a zero-tolerance policy towards

bribery and corruption and, in line with this, we

ensure all our employees are adequately trained.

In 2023, this module, alongside other

compliance training, was rolled out to our

Saunderson House colleagues. At the end of the

year, 952% (992% in 2022) of all Rathbones’

employees assigned completed our anti-bribery

and anti-corruption training.

CODE OF CONDUCT AND

WHISTLEBLOWING

Feeling secure and trusting that they will not

suffer adverse consequences helps our

employees if they feel the need to raise a

concern. Training on our code of conduct and

whistleblowing process occurs each year. In

2023, there were three cases raised via our

whistleblowing process. All three matters were

independently investigated and resolved.

COMMUNITY INVESTMENT

As we work to become a trusted partner, we

deliver both financial and in-kind support

through the Rathbones Group Foundation, our

employee Give As you Earn scheme, our

matching scheme and volunteering.

In 2023, we were pleased to invest £589172

(2022: £795116) in community projects. This

represents 138% of our pre-tax profit (124% in

2022). With our focus on equality of opportunity

and disadvantaged youth, we supported 77

charities. We were pleased to maintain our

HIGHLIGHTS

% OF IN SCOPE EMPLOYEES COMPLETING

ANTIBRIBERY AND CORRUPTION TRAINING

95.2%

2022: 99%

% OF SUPPLIERS ENGAGED ON ESG ISSUES

76%

2022: 69%

PERCENTAGE OF PRETAX PROFIT INVESTED

IN OUR COMMUNITIES

1.38%

2022: 1.24%

Further information is available in our:

Responsible business update

Modern slavery report

support for Social Shifters and Young Enterprise

(YE), aligning with the work we carry out

through our financial awareness programme.

Wealso supported the Disasters Emergency

Commission (DEC) Turkey-Syria appeal.

With an aim to encourage employee

volunteering, we reviewed our volunteering

policy. We maintained the three days a year,

allowance and saw more offices take the

opportunity of team volunteering days.

Employees at our Jersey office worked with the

Durrell Zoo. In Bristol, teams worked with their

partner FareShare.

Post-completion of the IW&I transaction the

structure of our support and giving was

reviewed and a new structure covering all

officesand colleagues was agreed.

FINANCIAL AWARENESS

We continue to recognise the importance of

financial awareness in society and alongside our

in-house sessions, continued our support for YE.

This partnership enables us to reach a broader

portion of society and run varied sessions in the

communities that need them most. We look

forward to working with YE as they enter their

anniversary year, supporting the delivery of

programmes and creating positive impact in the

communities in which we and they operate. Over

the past ten years, Rathbones sessions for 16-25

year olds have reached more than 12300 people.

We look forward to working with YE.

To read more about our work in financial

awareness please see our standalone responsible

business update.

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OUR ENVIRONMENTAL IMPACT

OUR APPROACH TO MANAGING

OUR IMPACT

In 2021, the group announced our intention to

be a net zero emissions business by 2050 or

sooner. Following the combination with IW&I ,

we will work to consolidate not only our

operational data which can be seen in the table

opposite but also our emissions exposure

through the investments we make on behalf of

our clients. In 2024 we will restate our net zero

near-term targets to reflect these changes.

KEY DRIVERS OF OUR

CARBON FOOTPRINT

We saw emissions increase in 2023, with

purchased goods and services remaining the

largest emissions source. As spend increased our

emissions also increased, 33% since 2020 to

over 4000 tCOe. Despite this, emissions grew

slower than spending as cost was focused on

lower-carbon services like legal and professional

services and software support, leading to a

reduction in emissions intensity from 016 to

012 kgCOe per £ between 2020 and 2023.

Business travel emissions continued to increase.

The most significant contributors to this increase

were road and air travel, particularly noticeable

in 2023. Long-haul flights and average passenger

travel had an impact, as colleagues returned to

travel post the 2020 period of lockdown. As

commuting is more intensive than working from

home, the change in employee commuting

emissions (1109 tCOe/FTE/working year vs

0681 tCOe/FTE/working year), results from an

increase in employee headcount, along with a

general decrease in the proportion of days

worked from home.

HIGHLIGHTS

RESOURCE CONSUMPTION

23,681 tC0e

2022: 22,025 tCOe

% OF FUMA ALIGNED WITH SBTI TARGETS

30%

2022: 22.9%

% OF CLIENTS USING THE MYRATHBONES

APP

58%

2022: 50%

OUR CARBON FOOTPRINT DATA

(INC. STREAMLINED ENERGY AND CARBON REPORTING)

Location-based emissions (tCOe) 2023 2022 2021

Scope 1 (tCOe) 584 639 675

emissions 584 639 675

Global

emissions (excl UK) - − −

Scope 2 (tCOe)

773 757 704

emissions 769 753 701

Global

emissions (excl UK) 4 4 3

Scope 3 (tCOe)

4, 5, 6, 8

22,324 20630 179 74

emissions 21,878 20621 17719

Global

emissions (excl UK) 446 368 255

Scope 3 – category 1: purchased goods and services

16,842 15413 13852

Scope 3 – category 2: capital goods

349 821 856

Scope 3 – category 3: fuel and energy-related activities

329 379 368

Scope 3 – category 4: upstream transportation

anddistribution

274 341 285

Scope 3 – category 5: waste generated in operations

14 16 14

Scope 3 – category 6: business travel

1,158 775 285

Scope 3 – category 7: employee commuting

3,287 2787 2197

Scope 3 – category 8: upstream leased assets

70 98 116

Total location-based emissions (tCOe)

23,681 22025 19353

UK emissions

23,231 21653 19094

Global emissions (excl UK)

450 372 258

Market-based scope 2 emissions

478 540 428

Total energy consumption (MWh)

8,056,025 8110666 7324444

UK consumption

7,955,402 7 8 9 07 92 7189538

Global consumption (excl UK)

100,623 94468 83971

Intensity ratios

Scope 1 and 2 – location-based emissions (tCOe/FUMA £bn)

12.9 138 121

Total location-based emissions (tCOe/FUMA £bn)

224.9 218 1701

Total location-based emissions (tCOe/FTE)

6.8 66 65

1. Following agreement of the combination with IW&I we have restated our environmental figures. All figures in the table include

IW&I emissions and are therefore comparable

2. In accordance with best practice introduced in 2015, we report two numbers to reflect emissions from electricity. Location-

based emissions are based on average emissions intensity of the UK grid and market-based emissions reflect emissions from our

specific suppliers and tariffs. Scope 2 market-based emissions for 2023 are 478 tCOe (2022: 540 tCOe)

3. Under SECR regulation we are required to split our global and UK emissions. Our global emissions (excl. UK) and global

consumption (excl. UK) reflect electricity emissions and consumption (respectively) from our Jersey office. It is not possible to

split out travel and allocate to our Jersey office at this stage

4. Data centre emissions are reported under Scope 3, as per the WRI GHG Protocol

5. Electricity transmission and distribution (T&D) reflects emissions from line losses associated with electricity transmission and

distribution

6. Emissions from water supply and treatment are included in our disclosure for the first time this year; 2021 emissions have been

restated to include these emissions

7. Total energy consumption (kWh) of our Scope 1 and Scope 2 emissions (electricity), and scope 3 (employee cars)

8. Emissions associated with hotel stays and employee cars were reported in business travel in 2022

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64RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

RESPONSIBLE BUSINESS REVIEW CONTINUED

OUR ENVIRONMENTAL IMPACT CONTINUED

OUR JOURNEY TO NET ZERO

We have committed to reaching net zero

emissions by 2050 or sooner. Our near-term

net zero emission targets have been validated

by the SBTi.

OUR ROADMAP MILESTONES

ACHIEVING NET ZERO ACROSS OUR OPERATIONS

ESG engagement across colleagues,

suppliers and clients

ESG integration and training External collaboration and advocacy

1. Our environmental target was set base on our 2020 operational and investment emissions footprint. Our investment target covered 91% of our FUMA as at 31 December 2020

2020 (BASE YEAR) 20302025 2040 2050

KEY LEVERS TO REACH OUR NET ZERO

TARGETS:

— Digitising our business: cloud computing,

data centre consolidation and digital

communications platforms

— Swapping to renewable energy suppliers

— Seeking out green building credentials

— Embedding our travel policy and hybrid

working

— Increasing the amount of relevant

information to support their decisions

— Training to enable our investment

managers to engage clients

— Engaging our suppliers on their climate

commitments

— Carbon removal credits, to offset our

residual emissions.

CHALLENGES AND PROGRESS

Whilst we have the data to support our

operational emission calculations, data related

to the emissions from the investments we hold

on behalf of our clients remain in development.

We regularly engage with data suppliers to

understand both their approach and coverage.

PROGRESS IN OUR

INVESTMENT TARGET

In 2023, 30% of our FUMA had set or

committed to set SBTi aligned targets. This is

up 71pp since 2022 and shows that we are on

track to meet our 2025 near-term target.

CHALLENGES IN OUR

OPERATIONAL FOOTPRINT

Whilst an obvious driver of change is the

increase in our property footprint and

employee figures year-on-year, as referenced on

the previous page, key drivers of the increase in

in operational footprint are products and

services, travel and employee commuting.

2020

BASELINE

21%

reduction across scope 1, 2 and 3

(categories 1-8)

100%

renewable energy sources

for our offices

42%

reduction across scope 1, 2 and 3

(categories 1-8) emissions

NET ZERO

2020

BASELINE

35%

listed equity and bonds portfolio,

by invested value, committing to set or

have set SBTi validated targets by 2025

(category 15)

57%

committing to set or have set SBTi

validated targets by 2030

100%

by 2040

this allows time for

those who have

committed to achieve

their targets

TCFD report

Responsible business update

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65RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TASK FORCE ON CLIMATERELATED

FINANCIAL DISCLOSURES STATEMENT

GOVERNANCE

Disclose the organisation’s governance around climate-related issues and opportunities.

TCFD RECOMMENDED

DISCLOSURE

2023 UPDATE CFD REQUIREMENTS ALIGNMENT

FURTHER INFORMATION

Describe the board’s

oversight of climate-

related risks and

opportunities

Responsibility for managing climate risks and opportunities sits with the Rathbones board. The board

is supported by several committees that maintain responsibility for the consideration and integration

of climate risks and opportunities in their area of specialism as appropriate.

The board is responsible for setting the right tone for the business, supporting a strong risk

management culture and, through our senior leadership team, encouraging appropriate behaviour

and collaboration across the business. The board regularly assesses the most significant risks and

emerging threats to the group’s strategy and receives updates at least twice a year via risk and

responsible business papers.

Oversight of risk management activities is also undertaken through the group risk and audit

committees. They offer support to the board, setting a constructive tone in support of a strong risk

culture, which is integrated into our company culture and which our people embrace as part of their

day-to-day responsibilities.

A description of the

governance arrangements of

the company or LLP in relation

to assessing and managing

climate-related risks and

opportunities

Audit committee

report: See pages

102-106

TCFD report

Describe management’s

role in assessing and

managing climate-related

risks and opportunities

We have assigned climate-related responsibilities to several individuals and committees across the

business. As chair of the responsible business committee, our group chief executive has responsibility

for bringing climate-related matters to the board; and our chief risk officer (CRO) is the senior

management function responsible for climate-related financial risks, as designated in accordance with

the Prudential Regulation Authority’s Supervisory Statement on managing financial risks relating to

climate change (SS3/19).

Additionally, there are a number of teams involved in assessing, managing and reporting on our

climate risk, including our finance, risk and compliance, research and investment teams, alongside

our supplier management function and properties and facilities departments. At an organisational

level responsibility for climate change-related matters lies with the company secretary and is led by

our responsible business manager.

Risk management:

See pages 77-86

TCFD report

1. Where partial alignment is indicated, the response is in full compliance with the relevant TCFD recommendation, however responses could be strengthened by increased availability of data and improvements to industry-wide methodologies

INTRODUCTION AND COMPLIANCE

As wealth managers, we have a fiduciary duty on

behalf of our clients to consider all long-term

risks that may impact their investments. We are

committed to helping our clients safeguard their

portfolios against physical and transitional risk as

the world moves to a low-carbon economy. At

Rathbones, we recognise that this is a

collaborative exercise that spans industries and

as such we are continuously engaging with our

stakeholders, including our clients, investors,

regulators and industry organisations, to improve

our collective climate reporting and help smooth

the transition to a net zero economy.

During the financial year ending 31 December

2023, the board has complied with the

requirements of the listing rule 986. Our report

includes a measurement of how we comply with

the 11 recommendations of the TCFD and with

the mandatory climate-related financial

disclosures (CFD) by publicly quoted companies,

large private companies and LLPs. In developing

the report, we have considered and addressed all

recommendations within the all-sector guidance

as well as the supplemental guidance for asset

managers in full. We have also included a map

toour compliance to the CFD. We continue to

engage with our stakeholders, see pages 49

to57,to gather input into our understanding

ofmaterial issues. The responsible business

committee, amongst others in our governance

structure consider which ESG issues are material

to our business and should be publicly reported.

In 2024, as we re-base our net zero commitment

we will undertake a materiality assessment to

further develop our understanding and

strengthen future disclosures. We have chosen

topublish our full 2023 TCFD disclosure as a

standalone statement, allowing us to report in

more detail and link from that report to applicable

content across our reporting suite. Our

standalone statement will be available as a PDF

on the reports and disclosure page of our website.

The following pages include a summary update

of our approach and also signpost to where more

information can be found.

Alignment level

Full

Partial

Further work required

TCFD report

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66RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TCFD STATEMENT CONTINUED

STRATEGY

Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s business, strategy and financial planning where such information is material

TCFD RECOMMENDED

DISCLOSURE

2023 UPDATE CFD REQUIREMENTS ALIGNMENT FURTHER INFORMATION

Describe the climate-

related risks and

opportunities the

organisation has

identiﬁed over the short,

medium, and long term

Rathbones’ climate-related risks include physical risks (arising from the physical effects of climate

change on the businesses’ operations, workforce, markets, infrastructure, raw materials and assets)

and transition risks (resulting from policy, legal, technology and market changes occurring from the

shift to a lower-carbon global economy). We have identified transition and physical risks that

materialise over the following timelines: short-term <1 year, medium term 1-5 years and long term >5

years. Importantly, the transition to a low-carbon future also provides Rathbones with opportunities

which, if acted on, stand to benefit the business. An overview, timeframe and a description of our

strategy to mitigate each risk and realise each opportunity is provided in the full report. Climate-

related risks have been integrated into our risk management framework to support our net zero

transition and are shared in the tables on pages 71-74.

A description of the principal

climate-related risks and

opportunities arising in

connection with the

operations of the company or

LLP and the time periods by

reference to which those risks

and opportunities are assessed

Responsible

investment report

TCFD report

Describe the impact of

climate-related risks and

opportunities on the

organisation’s

businesses, strategy

and ﬁnancial planning

The climate-related risks and opportunities that we face as a business occur across both our direct

operations and our investments. The actual and potential impacts of each risk and opportunity on our

business is described in the full TCFD report, as well as the mitigating actions we take in response.

Bytaking these actions, we endeavour to improve our resilience to the impacts of climate change in

our strategic decision-making and financial planning. Whilst our commitment to becoming a net zero

business by 2050 or sooner includes both our direct operations and our investments, we recognise

that the majority of our greenhouse gas emissions and other climate-related risks are derived from the

investments we hold on behalf of our clients. We continue to integrate climate considerations into our

investment approach and provide our clients with products that not only meet their financial needs

but can also adapt to the continually evolving environment. In addition to integrating consideration of

climate risk into our general investment process, we offer investment management offerings from

Rathbone Greenbank Investments, as well as the Rathbone Greenbank Global Sustainability Fund,

Rathbone Ethical Bond Fund and Rathbone Greenbank Multi-Asset Portfolios (GMAPs). We continue

to pursue an absolute reduction in our operational carbon footprint and offset residual emissions,

andin doing so respond to the operational climate-related risks and opportunities that we face as a

business. The focus of our operational carbon reduction efforts is primarily directed on the following

areas: resource consumption, energy efficiency, digitising our business and business travel.

A description of the actual and

potential impacts of the

principal climate-related risks

and opportunities on the

business model and strategy

ofthe company or LLP

Responsible

investment report

TCFD report

Describe the resilience

of the organisation’s

strategy, taking into

consideration dierent

climate-related

scenarios, including a

2°C or lower scenario

By using climate scenario analysis across physical and transitional risks, we assess the potential

impact of climate change on our portfolio, therefore helping to determine the resilience of our strategy

as an organisation. Considering the implications of different scenarios on assets and operations helps

us better understand and quantify the risks and uncertainties our investee companies may face under

different hypothetical futures, and how current or potential trajectories could drive business value.

Ata granular level, it allows us to identify companies that are particularly exposed to transition or

physical risks, and which ones are likely to benefit from low-carbon technology opportunities. We use

these results, combined with other climate metrics, to identify priority companies for engagement

and monitoring, and to explore the role we can play alongside policy and corporate action to mitigate

climate risk and promote climate-related opportunities. View our scenario analysis results in our

TCFD report.

An analysis of the resilience of

the business model and

strategy of the company or

LLP, taking into consideration

different climate-related

scenarios

Responsible

investment report

TCFD report

Alignment level

Full

Partial

Further work required

TCFD report

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67RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TCFD STATEMENT CONTINUED

RISK MANAGEMENT

Disclose how the organisation identifies, assesses and manages climate-related risks

TCFD RECOMMENDED

DISCLOSURE

2023 UPDATE CFD REQUIREMENTS ALIGNMENT FURTHER INFORMATION

Describe the

organisation’s processes

for identifying and

assessing climate-related

risks

Risks are identified within a three-tier hierarchy, with the highest level containing business and

strategic, financial, conduct and operational risks. Risks are assessed on an inherent and residual

basisacross a three-year period according to several impact criteria and includes consideration of

theinternal control environment and/or insurance mitigation. Climate-related risks such as changes

to existing regulation are identified and assessed as part of our hierarchical approach to risk

management.

A watch list is maintained to record any current, emerging or future issues, threats, business

developments and regulatory or legislative change. The group’s risk profile, risk register and watch

listare regularly reviewed by the executive committee, senior management, board and group

riskcommittee.

We rely on the stress test work undertaken as part of our ICAAP process to recognise the potential

impact of climate or ESG risk on investment valuations, particularly for securities where ESG risk is

high or unmanaged, thereby connecting these risks to our financial stability.

A description of how the

company or LLP identifies,

assesses and manages climate-

related risks and opportunities

Risk management:

See pages 77-86

TCFD report

Describe the

organisation’s processes

for managing climate-

related risks

We have a well-established approach to risk management, which has continued to evolve in response

to the firm’s growth and external developments. Our risk governance, processes and infrastructure

are designed to ensure that appropriate risk management is applied to existing and emerging

challenges to the firm’s day-to-day activities and strategic objectives.

The board, executive committee and group risk committee regularly review and at least annually

formally approve the group’s risk appetite statement, ensuring it remains consistent with our strategy

and objectives. Our appetite framework is aligned with the group’s overall prudential requirements for

strategic, financial and non-financial risk (conduct and operational), and specific appetite measures

are set for each principal risk.

Risks that have triggered key risk indicators or risk appetite measures are reported and escalated in

accordance with our framework to the executive committee, the group risk committee and the board

as appropriate, so that risk mitigation can be reviewed and strengthened if needed.

Risk management:

See pages 77-86

TCFD report

Describe how processes

for identifying, assessing

and managing climate-

related risks are

integrated into the

organisation’s overall

risk management

Our risk management framework (RMF) provides the foundation and organisational arrangements for

identifying, monitoring, reviewing and continually improving risk management throughout the firm.

Climate-related risks are identified and assessed as part of our hierarchical approach to risk

management.

More specifically, our exposure to climate-related risks is most material through the investments we

make on behalf of our clients. The management of these risks is integrated into four of Rathbones’

core responsible investment principles and pillars: ESG integration, voting with purpose, engagement

with consequences and transparency. We are in the process of developing our ESG client reporting

framework to support clients in the comprehension and monitoring of the climate and ESG

characteristics of their portfolio.

A description of how processes

for identifying, assessing and

managing climate-related

risks are integrated into the

overall risk management

process in the company or LLP

Risk management:

See pages 77-86

TCFD report

Alignment level

Full

Partial

Further work required

TCFD report

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68RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TCFD STATEMENT CONTINUED

METRICS AND TARGETS

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material

TCFD RECOMMENDED

DISCLOSURE

2023 UPDATE CFD REQUIREMENTS ALIGNMENT FURTHER INFORMATION

Describe the targets used

by the organisation to

manage climate-related

risks and opportunities

and performance

against targets

Using 2020 as a baseline year, we will work to achieve a 42% reduction in operational and supply

chain emissions by 2030, with 35% of the investments held on behalf of our clients having

committed to or having set their own targets by 2025 (57% by 2030). This is in line with our objective

of achieving 100% investment coverage by 2040. Our targets include listed equity and bonds

(common/preferred stock, corporate bonds, ETFs, investments in REITs, real estate).

These were validated in October 2022 by the SBTi, confirming that our scope 1 and 2 target ambition

has been determined in line with a 15°C trajectory. Our target for lending and investment portfolios

meets the SBTi’s criteria for ambitious climate goals, meaning they are in line with current

bestpractice.

These targets correspond to all climate-related risks and opportunities outlined in the table on

pages71-74.

Description of the targets used

by the company or LLPs to

manage climate-related risks

and to realise climate-related

opportunities and of

performance against

thosetargets

Our environmental

impact: See pages

64-65

Responsible business

update

TCFD report

Disclose the metrics used

by the organisation to

assess climate-related

risks and opportunities in

line with its strategy and

risk management process

We use several metrics to measure the progress of our net zero journey, which is the primary

measureof our response to climate-related risks and opportunities. Specifically, these include carbon

emissions (scopes 1, 2 and 3) and GHG intensity indicators. Therefore, percentage reduction across all

scopes is a key performance indicator used to measure our overall progress.

In addition to our operational metrics , we use a selection of other metrics to inform our climate risk

and engagement strategy. The primary performance indicator used to measure progress towards our

SBTi engagement target (detailed above) is the percentage of our portfolio which has set or committed

to setting SBTi targets. This year, 30% of our portfolio has set or is committed to setting an SBTi target,

up from 23% last year. Additionally, we have used a number of data sources to calculate the carbon

emissions associated with our clients’ investments (scope 3, category 15). We worked with our

research team to determine our absolute carbon emissions, weighted carbon emissions and average

weighted carbon intensity. We also consider the coverage of our portfolio that have set or committed

to SBTi aligned targets.

The key performance

indicators used to assess

progress against targets used

to manage climate-related

risks and realise climate-

related opportunities and a

description of the calculations

on which those key

performance indicators

arebased

Our environmental

impact: See pages

64-65

Responsible business

update

TCFD report

Disclose Scope 1, Scope

2, and, if appropriate,

Scope 3 GHG emissions,

and the related risk

We share our scope 1, 2 and material scope 3 GHG emissions and related risks on page 64, and for

more information on the metrics and targets used, see our standalone TCFD report.

Responsible business

update

TCFD report

Alignment level

Full

Partial

Further work required

TCFD report

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69RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TCFD STATEMENT CONTINUED

ENTITY LEVEL AND BUSINESS REPORTS

TCFD RECOMMENDED

DISCLOSURE

2023 UPDATE CFD REQUIREMENTS ALIGNMENT FURTHER INFORMATION

Disclose and areas where

entity approaches dier

from those shared in the

group disclosure

Full details on the entity-level TCFD reports are found in the appendix of our standalone TCFD report.

Including:

— Rathbones Investment Management

— Rathbones Investment Management International

— Greenbank Investments

— Rathbones Asset Management

— Investec Wealth & Investment UK.

n/a

TCFD report

Rathbones

Investment

Management

Rathbones

Investment

Management

International

Greenbank

Investments

Rathbones Asset

Management

Investec Wealth &

Investment UK

Alignment level

Full

Partial

Further work required

TCFD report

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70RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TCFD STATEMENT CONTINUED

CLIMATERELATED RISKS

As a business, we consider several transitional

and physical risks and opportunities. In the table

below, we have provided a description of each

climate-related risk and opportunity, an

assessment of the potential impact on the

business and our mitigation response. All risks

and opportunities outlined below are deemed

material to the business and correspond to

Rathbones group principal risk categories (full

definitions of which can be found on pages 82.

For more details on how we identify, manage and

respond to these risks, please see the risk

management section of the full TCFD report.

TRANSITIONAL

RISK TYPE AND DESCRIPTION DESCRIPTION OF ACTUAL AND POTENTIAL IMPACT MITIGATION RESPONSE

REPUTATIONAL

Failure to manage climate

transition risk within our

existing portfolios

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Reputational

Claims for financial compensation, loss of business and loss of

market share.

An increase in the likelihood of compensation and loss of

business if we do not deliver on our fiduciary duty to clients by

managing climate transition in our portfolio construction. This

could also include a potential loss in market share if we fail to

accurately communicate the climate-related credentials of our

ethical and ESG focused investment funds.

Ongoing risk policy reviews, company engagement with clients and investees, and capability building

for our investment and fund managers.

We review our investment risk policy at least annually. This, alongside our engagement programme,

which includes a focus on climate and delivery of net zero plans by our investee companies, supports

our response to the changing landscape and increased regulation.

We offer training to our investment managers to support client conversations and risk review as part of

portfolio construction. This training helps to support open and transparent communication with our

stakeholders on consideration of climate risk as part of the investment process.

In 2023, our investment and fund managers continued to engage our clients on ESG integration.

Long term Medium term Short term

Time horizon

High Medium-high Medium Low

Magnitude

Increasing Stable Decreasing

Risk trend

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71RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

Long term Medium term Short term

Time horizon

High Medium-high Medium Low

Magnitude

Increasing Stable Decreasing

Risk trend

RISK TYPE AND DESCRIPTION DESCRIPTION OF ACTUAL AND POTENTIAL IMPACT MITIGATION RESPONSE

POLICY

Failure to maintain compliance

with enhanced emissions-

reporting obligations and

readiness for emerging

regulations

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Regulatory, compliance and legal

Fines as a result of regulatory action, reputational damage and

increased operational costs due to unplanned remedial action.

Increased climate-related reporting obligations such as SECR and

TCFD incur additional costs to ensure compliance. We expect

that current reporting frameworks out for consultation may also

incur cost for compliance.

Ongoing monitoring of legislative landscape using internal and external resources.

We continue to ensure that our operating model supports our policy and reporting obligations by

increasing the resources allocated to the responsible business function.

We continue the annual retention of external consultants to support the business and ensure continued

compliance with existing and preparation for emerging regulation. Our strategic change agenda focuses

outcomes on emerging regulatory compliance, e.g. the Sustainability Disclosure Requirements.

In 2023, the executive risk committee reviewed our plan to respond to the expanded TCFD reporting

requirements including on-demand client communication.

MARKET RISK

Inability to attract co-financiers

due to uncertain risks related to

climate change

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Sustainability

If the business model does not respond in an optimal manner to

changing market conditions, including environmental and social

factors, such that sustainable growth, market share or profitability

is adversely affected. This could result in loss of clients that could

have a significant revenue impact.

We are aware of the long-term shift in customer expectations and preferences towards more ethical and

ESG focused funds and must adapt accordingly to this market change. In response to this, we continue

to offer ethical and ESG focused funds. Our Ethical Bond Fund reached £21 billion at 31 December

2023 (2022: £22 billion) while the Rathbone Greenbank Global Sustainability Fund now manages

£690 million (2022: £706 million).

We also offer the Rathbone Greenbank Multi-Asset Portfolios (RGMAPs) fund range. The RGMAPs funds

are managed by Rathbones’ multi-asset team and supported by Rathbone Greenbank Investments now

manage £388 million.

To support this growth, we continue to ensure we have the right resource in place and work to have data

available to help our assessment of the risk and opportunities for the investments we make on behalf of

our clients.

PRODUCT AND SERVICES

Technology – substitution of

existing products and services

with lower emission options

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Sustainability

Rathbones recognise the importance of technology and IT

processes in the transition to a net zero future. Failure to do so

poses a significant risk to our own operations and in our value

chain through increased costs and stranded assets.

We continue to manage and monitor our carbon footprint accurately, which informs our carbon

reduction efforts in line with our SBTi targets. This is achieved through a reduction in utilised

datacentre capacity due to consolidation and transformation, moving services to cloud-based solutions.

Leveraging cloud services means we can scale up and down the services needed thereby saving energy,

cost and effort when not in use. In 2023, we decommissioned 16 physical servers and two storage

devices that allowed us to reduce our power draw by 1531%. We also completed an assessment on the

remaining data centre and the benefits of migrating to Azure, which has an expected reduction of

203575kg COe over a five-year period.

We further drive digitisation reducing paper in our processes. We have an established print

management system including a centralised print management and reporting facility, and improved

digital tooling. In 2023, an additional 27% of clients used MyRathbones to access valuation and tax

packs as well as custody location reports. At year end, 58% of clients were registered on MyRathbones.

This has also saved £35 million in print postage. In 2024, we will roll out digital contract notes that aim

to remove 240000 paper copies.

TRANSITIONAL CONTINUED

CLIMATERELATED RISKS CONTINUED

STRATEGIC

REPORT

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STATEMENTS

GOVERNANCE

REPORT

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INFORMATION

72RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CLIMATERELATED RISKS CONTINUED

PHYSICAL

RISK TYPE AND DESCRIPTION DESCRIPTION OF ACTUAL AND POTENTIAL IMPACT MITIGATION RESPONSE

ACUTE: EXTREME

WEATHER EVENTS

The impact of climate change-

related extreme weather events

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Business continuity

Extreme weather could cause disruption to our business

operations and continuity. Whether directly or through the

impact on our supply chain. This may result in increased

operational expenses to rectify the damage.

We continue to enhance our business resilience framework. We maintain business continuity plans

(BCP) to facilitate our ability to continue operating in the event of a disruption. At Rathbones, we aim to

have effective, proportionate and resilient business continuity arrangements in place across the group,

to prevent, respond to, recover from and learn from disruption. We ran a cycle of contingency testing

in2023.

Outside of our direct operations, we maintain oversight of critical and significant supply chain and

undertake an ESG review on all of our critical, strategic and preferred suppliers. This includes whether

they have set environmental targets aligned with a net zero commitment. At year end, we had reviewed

76% of in scope suppliers, more details on the findings of which can be found in our responsible

business update. We also run our third-party suppliers through a spend-based footprint calculation tool

to understand our full scope-three value chain footprint.

CHRONIC:

CHANGES IN WEATHER

PATTERNS

The impact of long-term changes

in weather patterns, such as air

temperature and precipitation

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Suitability

We have investments in global companies that are reliant on

efficient manufacturing. Chronic changes in weather patterns or

rising sea levels may impact their operations and consequently

the financial value of their company assets which may result in

increased operational expenses and lower returns for our clients.

This in turn leads to a risk of our current clients leaving and not

being able to attract new clients as they may feel we have not

considered the material risks impacting their investments.

We have developed responsible investment frameworks and data to focus on issues such as materiality,

sustainability alignment, climate and other ESG metrics.

Over the past year we have enhanced these frameworks with more granular detail, taking into account

sectoral considerations. In tandem, we are developing sector specific standards informed by industry

focused indicators, our own research expertise and engagement activities.

The application of the integration approach is tailored to fit the relevant investment service or mandate.

This means that the investment manager or fund manager is accountable for interpreting ESG and

stewardship information to inform investment decisions in the context of the suitability of the mandate

or client objective.

Long term Medium term Short term

Time horizon

High Medium-high Medium Low

Magnitude

Increasing Stable Decreasing

Risk trend

STRATEGIC

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CLIMATERELATED

OPPORTUNITIES

Importantly, the transition to a low-carbon economy also provides Rathbones with opportunities

which, if acted on, stand to benefit the business. An overview, timeframe and a description of our

strategy to realise each opportunity is provided in the table below.

OPPORTUNITY AND DESCRIPTION DESCRIPTION OF ACTUAL AND POTENTIAL IMPACT STRATEGY TO REALISE OPPORTUNITY

PRODUCTS AND SERVICES

Shift in consumer preferences

leading to increased revenues

from increased demand for

products and services. All of the

regulatory opportunity drivers

listed have the potential to affect

our business through the impact

they may have on companies or

assets in which we invest.

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Sustainability

An opportunity for us lies in the development of new products

and solutions, developing an offering that meets client needs.

Allof the regulatory opportunity drivers listed have the potential

to affect our business through the impact they may have on

companies or assets in which we invest.

Our client team informs our client proposition, strategy and insight. In 2023, further enhancements

were made to our ESG integration approach. This included further developments to our climate metrics.

We deliver innovative low-carbon solutions that demonstrate our commitment to managing climate

risks and impacts effectively throughout our clients’ financial journeys. By embedding climate risk

thoroughly across client portfolios, we will identify opportunities created by the transition to a

low-carbon economy.

Future client offerings will leverage existing solutions across our business, from our ethical, sustainable

and impact investment specialists at Greenbank, through to sustainable and ethical funds already

available through Rathbones Asset Management, such as the Rathbone Greenbank Global Sustainability

Fund and the new fund range released in 2021, our Rathbone Greenbank Multi-Asset Portfolios

(RGMAPs) fund range. In 2023 RAM released our global sustainable bond fund.

Through our responsible investment and responsible business committees, we have the capacity to

monitor regulatory opportunities as they emerge and incorporate them into our investment policies.

This should enable us to adapt our investment strategies as necessary in order to maintain current levels

of investment performance and continue to meet our clients’ expectations in terms of projected returns.

We believe this approach could support us in expanding our customer base.

MARKETS

Increase market share by

responding to changing

stakeholder demands

RATHBONES GROUP

PRINCIPAL RISK CATEGORY:

Market and reputation

Where appropriate, and in line with our conflicts of interest

policy, we will seek to engage with reputable sustainability

indexes or collaborative efforts. In line with this, we have

becomesignatories or aligned with several high-level

collaborative organisations.

We support the work of the: – Principles of Responsible

Investment (PRI) – Institutional Investors Group on Climate

Change (IIGCC) – Net Zero Asset Managers Initiative – Net Zero

Investment Framework. As members of such organisations, we

have the capacity to contribute towards the improvement of

several important climate and ESG issues.

We believe that ESG issues – both risks and opportunities – can

affect the long-term performance of investments. We continue to

build out our research, data and decision frameworks so that we

can better understand and weigh up ESG factors alongside other

investment considerations.

We have made it a priority to join collaborative efforts and become signatories of reputable indexes, as

we recognise that many ESG issues are systemic, and hence are more suited to coordinated cross-

sectoral action.

We responded to sustainable disclosure requirements (SDR) consultation, supporting the development

of transparent client communication on sustainability matters. We continued our role as lead investor

for SSE Plc and National Grid Plc through Climate Action 100+ and as lead investors for an IIGCC

engagement with Rio Tinto and Thyssenkrupp on net zero audits. We joined the Taskforce on Nature-

related Disclosures (TNFD) Forum to support broader discussions on biodiversity.

Our aim is to develop a more comprehensive view of a business’ strategy, the way it executes this

strategy and the dynamics of its sector than can be achieved solely through a financial lens. We do this

by using ESG data, engaging with companies and exercising our carefully considered judgement. This

helps us identify companies with stronger sustainability performance and those with whom, through

engagement, we see potential to improve business practices to create value for shareholders.

We continue to integrate ESG factors into our investment processes. In 2023, we identified companies

for climate-related engagement and in line with our pillars of responsible investment. Using scenario

analysis and the map of SBTi commitments against our clients’ investments, we identified priority

companies that we believe by engaging with we could support future alignment to a 15

C world.

Long term Medium term Short term

Time horizon

High Medium-high Medium Low

Magnitude

Increasing Stable Decreasing

Risk trend

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NONFINANCIAL AND SUSTAINABILITY

INFORMATION STATEMENT

The information presented here, including the sections referred to, represents our non-ﬁnancial information statement as required by sections 414CA and 414CB

of the Companies Act 2006. The next pages contain a summary of our approach to management of these aspects of our business and measuring our performance.

ISSUE AND SUMMARY RELEVANT POLICIES AND POLICY OUTCOMES OVERVIEW OF DUE DILIGENCE PROCESS

EMPLOYEES

We are a people business, it is therefore imperative

that our strategy sets a culture that drives

performance and builds long, rewarding careers

for our colleagues. Based around a common set of

values and our DE&I commitment we are focused

on becoming a more diverse business that will

support us in delivering value to our clients.

Our people: See page 61

— Regular employee engagement surveys

— Workforce engagement programme

— Regular tracking of people metrics and trends

— Diversity, equality and inclusion strategy

— Executive sponsored inclusion networks.

— Code of conduct

— Equal opportunities policy

— Health and safety policy

— Compliance framework policy

— Anti-bribery policy

— Rathbones is the employer of choice for the

wealth sector.

SOCIAL IMPACTS

We are committed to being a trusted member of

the communities in which we operate. The

Rathbones Group Foundation supports projects

that align with our focus on opportunities for

disadvantaged youngsters.

Society and communities: See page 63

— Responsible business committee has oversight

of our responsible business programme and

how we work to have a positive impact.

— Code of conduct

— Community investment Guidelines

— Anti-bribery policy

— Rathbones is a trusted partner in the

communities in which we operate.

HUMAN RIGHTS

Rathbones is committed to respecting the human

rights of others. Our approach aligns with our

membership of the UNGC and commitment to

provide decent work and economic growth.

Society and communities: See page 63

— Responsible business committee reviewed our

modern slavery statement and received reports

on our ongoing supplier engagement on ESG

matters

— 76% of our suppliers have been reviewed in

alignment with our ethics questionnaire.

— Code of conduct

— Modern slavery statement

— Anti-bribery policy

— Rathbones understands and manages our human

rights and modern slavery risk.

MORE INFORMATION

OUR BUSINESS MODEL

Read more: See page 27

OUR PRINCIPAL RISKS

Read more: See page 82

OUR PEOPLE

Read more: See page 63

For more information on our strategy

seepages 22 to 26.

Published policies can be found on

ourwesite.

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NONFINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT CONTINUED

ISSUE AND SUMMARY RELEVANT POLICIES AND POLICY OUTCOMES OVERVIEW OF DUE DILIGENCE PROCESS

CLIMATE AND ENVIRONMENT

In 2021, Rathbones committed to achieve net

zeroemissions by 2050 at the latest. In 2022, our

SBTi aligned near-term targets were validated.

We continue to monitor and manage the carbon

emissions of our operations, recognising that the

most material exposure is through the

investments we make on behalf of our clients.

Our environmental impact: See page 64

— Climate governance structure in place

— Responsible business committee monitors the

climate-related risks operationally

— Responsible investment committee oversee the

investment aspects of our net zero commitment

and the impact on the investments we hold on

behalf of our clients

— Engagement committee proposes our

stewardship programme

— Executive risk committee oversees an annual

review of our climate risk appetite.

— Responsible investment policy

— Group’s climate statement

— Net zero emissions commitment

— Fossil fuel statement

— Thermal coal exclusion policy

— Rathbones delivers progress against our 2050 net

zero commitment and near-term targets.

ANTICORRUPTION AND BRIBERY

Rathbones has a zero-tolerance towards anti-

bribery and corruption.

All employees must comply with our code of

conduct and complete our conflicts of interest

submission.

Society and communities: See page 63

— Risk-based training for employees, in 2023 it

was completed by 952% of in scope employees

— Due-diligence of all third-party relationships

— Gifts and entertainment policy

— Conflict of interest policy

— Whistleblowing policy.

— Anti-bribery policy

— Conflicts of interest policy

— Whistleblowing policy

— Rathbones maintains our zero tolerance to

anti-bribery and corruption culture seeking to

prevent, detect and report any identified cases of

bribery and corruption

— In 2023, there were three cases raised via our

whistleblowing hotline.

MORE INFORMATION

OUR ENVIRONMENTAL IMPACT

Read more: See page 63

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BUSINESS AREAS AND LINES OF DEFENCE

1 2 3

FIRST LINE OF DEFENCE

Senior management

Business operations and control functions

SECOND LINE OF DEFENCE

Risk, compliance and anti-money

laundering functions

THIRD LINE OF DEFENCE

Internal audit

RESPONSIBILITY

Responsible for managing risk in line with

riskappetite by developing and maintaining

an effective system of internal control.

RESPONSIBILITY

Responsible for the risk management

framework and the independent

oversightand challenge of first line

riskmanagement activity.

RESPONSIBILITY

Responsible for providing independent

assurance to senior management on the

effectiveness of governance, risk

managementand internal control.

RISK MANAGEMENT AND CONTROL

Our approach to risk management is

fundamental to supporting the delivery

of our strategic objectives. Our risk

governance and risk processes are designed

to enable the ﬁrm to manage risk eectively

in accordance with our risk appetite and to

support the long-term future of the ﬁrm.

MANAGING RISK

The board has overall responsibility for risk

management across the group, regularly assessing

the most significant risks and emerging threats to

the group’s strategy. The board delegates oversight

of risk management activities to the group risk

and audit committees. Our risk governance and

risk management framework supports the chief

executive and executive committee members

with their day-to-day responsibility for

managing risk.

RISK CULTURE

The risk culture embedded across the group

enhances the effectiveness of risk management

and decision-making. The board promotes a

strong risk culture, reinforced by our executive

and senior management team, which encourages

appropriate behaviours and collaboration on

managing risk across the group.

Risk management is an integral part of

everyone’s day-to-day responsibilities and

activities; it is linked to performance and

development, as well as to the group’s

remuneration and reward schemes. We aim

tocreate an open and transparent working

environment, encouraging employees to engage

positively in risk management in support of the

achievement of our strategic objectives.

RISK GOVERNANCE AND THREE LINES OF DEFENCE

We operate a three lines of defence model to support risk governance and risk management across the group

GOVERNANCE

BOARD AUDIT COMMITTEE GROUP RISK COMMITTEE EXECUTIVE COMMITTEE

EXECUTIVE RISK COMMITTEE

BANKING COMMITTEE

Sets strategy and risk appetite

across the group, and is ultimately

accountable for risk management.

Monitors and reviews the

effectiveness of internal controls

with oversight of the internal

audit function in line with the

group’s risk profile on behalf of the

board. It also oversees the

appointment and relationship

with the external auditor.

Oversees effectiveness of the

risk management framework

and activity across the group.

Advises the board on risk appetite,

risk assessment, risk profile and

risk culture.

First line committees with

responsibility for management

of risk and internal control

across the group.

Read more about our risk management

process: See page 80

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RISK MANAGEMENT AND CONTROL CONTINUED

RISK APPETITE

The board approves the firm’s risk appetite

statement and framework at least annually to

ensure it remains consistent with our strategic

objectives and prudential responsibilities.

Specific risk appetite statements are set and

measures established for each principal risk.

The risk appetite framework supports strategic

decision-making, as well as providing a

mechanism to monitor our risk exposures.

The position against our risk appetite statements

and measures is assessed and reported on a

regular basis to the executive committee, group

risk committee and the board.

Given the current economic outlook and the

evolving regulatory landscape within the sector,

the board remains committed to having a

relatively low overall appetite for risk in line

withour strategy. The board recognises our

performance is susceptible to fluctuations in

investment markets and has the potential to

bearlosses from financial and non-financial

risksfrom time to time, either as reductions in

income or increases in operating costs.

Risk appetite measures and thresholds have

been approved by the board for 2024, taking into

account the combination between Rathbones

and IW&I. This year’s measures reflect the scale

of the enlarged group but, other than this, there

have been no other material changes to our

appetite for risk. As the business models

integrate, our position against these measures

will be closely monitored and exceptions

reported as required.

RISK CATEGORIES RISK APPETITE STATEMENT STRATEGIC ALIGNMENT

BUSINESS AND

STRATEGIC RISK

Business and strategic risks will be identified and actively

managed to protect the ability to deliver sustainable growth.

Change initiatives will be orientated towards longer-term

client, stakeholder and societal expectations.

BUSINESS RESILIENCE

Supporting and delivering growth

FINANCIAL RISK

Financial risks will be actively managed to preserve the

group’s overall resilience.

Credit and market risk exposures will be managed to board

approved instruments and limits in order to protect company

assets and maintain prudent levels of liquidity and regulatory

own funds.

The group will also continually monitor and respond to risks

arising from its pension scheme obligations.

FINANCIAL RESILIENCE

Supporting and delivering growth

NONFINANCIAL RISK

(CONDUCT AND

OPERATIONAL)

Conduct and regulatory risks associated with our business

arerecognised; however, we have no appetite for intentionally

inappropriate behaviour or action by any entity within the

group or employees that could have a material detrimental

impact on clients, key stakeholders and our reputation.

Operational risks and losses can arise from inadequate

orfailed internal processes, people or systems, or from

externalevents. We have an extremely low appetite for losses

and no appetite for systemic or materially high risk events

that could affect the operational resilience of important

business services.

REGULATORY AND

OPERATIONAL RESILIENCE

Enriching the client and adviser

proposition and experience

Inspiring our people

Operating more efficiently

1 3 4

Read more about our strategic priorities:

See page 22

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

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RISK MANAGEMENT AND CONTROL CONTINUED

RISK MANAGEMENT PROCESS

Our risk management process is a defined

approach to identify, assess and respond to risks

that could affect delivery of strategic objectives

and annual business plans. The board, executive

and senior management are actively involved in

this process.

Risks are identified within a three-tier hierarchy,

with the highest level containing business and

strategic, financial, conduct and operational

risks. Risks are assessed on an inherent and

residual basis across a three-year period

according to several impact criteria, which

include consideration of the internal control

environment and/or insurance mitigation.

We maintain a watch list to identify and evaluate

current issues and emerging risks as a result of

business development or changes in the

regulatory landscape, as well as threats and

issues in the wider external environment.

Thishelps inform the view of the firm’s current

and longer-term risk profile, and influences

management’s decisions and actions.

Stress tests are undertaken to include

consideration of the impact of a number of

severe but plausible events that could impact

thebusiness. This work takes account of the

availability and likely effectiveness of

mitigatingactions that could be taken to

avoidorreduce the impact or likelihood of

theunderlying risks materialising.

The group’s risk profile, risk register, watch

listand stress tests are regularly reviewed

andchallenged by the executive, senior

management, group risk committee and

theboard.

— Risks are identified in the context of the

group’s strategic objectives and aligned with

our approved group risk taxonomy

— Risks are identified from a top-down and

bottom-up basis from group executive and

business unit risk owners

— In addition, a watch list is a key tool used to

highlight current and emerging issues,

potential threats and both business and

regulatory change likely to affect the group’s

overall risk profile

— Enterprise risk management (ERM)

software is embedded to capture all

riskinformation.

— Risks are assessed on both an inherent and

residual basis considering their impacts

andlikelihood

— Risk impact is considered through multiple

lenses including client, financial, regulatory

and reputational

— Likelihood is considered over a three-year

period

— Risk events and issues are recorded within

the ERM software and linked to risks based

on materiality to help evaluate control

effectiveness and the residual risk ratings

— Internal Capital Adequacy Assessment

Process (ICAAP) and Internal Liquidity

Adequacy Assessment Process (ILAAP)

stress test principal risks across the group.

— Risk information is routinely reported at

governance committees across the group

— Group risk committee convenes at

leastquarterly

— Executive risk committee meets

everymonth

— A standing agenda across both committees

is defined to ensure complete coverage of

risk reporting and executive attendance

istracked.

RISK REPORTING

RISK IDENTIFICATION RISK EVALUATION

— Control environment established to

mitigate risks to an appropriate level

— Independent control assurance processes

are established across the three lines of

defence as well as through routine reviews

conducted by external auditors

— Risk indicators are developed for each

principal risk to provide an early signal of

increasing risk exposure. Thresholds dictate

an early warning trigger, a breach of risk

tolerance through to invocation of the

recovery and resolution plan

— ICAAP and ILAAP is used to calculate

regulatory capital required in the event that

principal risks should crystallise.

RISK MITIGATION AND CONTROL

RISK

MANAGEMENT

PROCESS

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RISK MANAGEMENT AND CONTROL CONTINUED

EXTERNAL EMERGING RISKS

AND THREATS

Emerging risks, including legislative and

regulatory change, which have the potential to

impact the group and delivery of our strategic

objectives, are monitored through our watch list.

During the year, the executive committee

continued to recognise and respond to a number

of emerging risks and threats to the financial

services sector as a whole and to our business.

In addition, throughout 2023 we have continued

to develop our approach to monitoring strategic

risks and horizon threats.

Our view for 2024 is that we can reasonably

expect current market conditions and

uncertainties to remain, given the wide range of

global economic and political scenarios which

could emerge.

NEAR TERM

GLOBAL AND UK

SPECIFIC POLITICAL

TENSIONS

Geopolitical risk remains a significant threat to financial stability. War in the Middle East and war between Russia and Ukraine as well as

tension between the US and China has driven increased inflation and market volatility. To help us identify and monitor this risk we’ve

partnered with geopolitical risk experts to define relevant red flags that will in turn help us to adjust our portfolios accordingly.

UK AND GLOBAL

ECONOMIC

CHALLENGES

The UK economy continues to show signs of stress accompanied by falling inflation. The former is mainly a consequence of past increases

in interest rates, while the latter has been helped by easing global price levels, particularly for energy. Analysts predict the GDP growth for

the UK will be modest and momentum in other economies will be slower.

CYBER THREATS

AND SUPPLY CHAIN

RESILIENCE

The sophistication of cyber attacks is ever-evolving, especially as our digital environment advances. Attacks have become far more

persistent with a notable increase in frequency since the invasion of Ukraine. Rathbones is committed to enhancing the technology

infrastructure to help mitigate the risk.

MEDIUM TERM

CHANGING

REGULATORY

EXPECTATIONS

The regulatory landscape is an area of fast paced change centred on client advocacy, transparency and integrity. Of note Consumer Duty

requirements have successfully been implemented throughout 2023. Work on fair consumer outcomes will continue following the

issuance of the Dear CEO letter FCA Expectations for Wealth Managers and Stockbroking Firms. The look ahead shows that 2024 will be

another busy year with key implementation dates for regulatory change.

PANDEMIC

Whilst operational resilience to a future pandemic is much improved following the COVID-19 outbreak, a future infectious disease

epidemic could emerge and with that comes the economic repercussions and slow recovery from it.

CLIMATE CHANGE

TRANSITION RISK

Climate and environmental risk is a key focus as we move towards achieving net zero emissions by 2050 or sooner. Alongside reviewing

our governance structures, we will continue to integrate data, develop metrics and increase disclosures in our client reporting.

DIGITAL

INNOVATION

Developing technology across the wealth management sector poses a continual threat to maintaining a competitive advantage. Digital

capability is less of a barrier to engaging clients and servicing their needs, in particular younger generations where there is an expectation

of online accessibility. Rathbones is implementing a strategic programme of change to ensure our digital technology meets the needs of

our prospective and existing clients.

NEW ENTRANTS

TO THE MARKET

AND ARTIFICIAL

INTELLIGENCE AI

The threat of new non-traditional entrants to the investment sector is a higher probability with Fintech developers challenging

established investment providers with their products and services. In addition, AI capabilities, from advanced analytics, automation

andpredictive intelligence is fast becoming seen as a future competitive advantage within the financial sector.

LONGER TERM

GENERATIONAL

WEALTH CHANGE

Studies show that the over 45s and especially the post-war ‘baby boomers’ retain a significant portion of the UK wealth in the form of

property and pensions. This wealth will begin to transfer to younger beneficiaries over the next 30 years. Generational differences could

drive changes in behaviours and appetite towards investments.

SOCIAL CARE

FINANCING

Accessibility and inequality in the adult social care sector has been a topic of concern for some time and it continues to be a risk to assets

under management, with clients drawing on their investments to pay for their care fees.

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PRINCIPAL RISKS

PROFILE AND MITIGATION OF

PRINCIPAL RISKS

Overall, we believe the group’s underlying risk

profile is stable; however, during the past year it

has fluctuated as a result of market volatility and

the changing economic and political landscape.

We continually assess our risk profile against

both internal and external risk drivers and

are investing further in our people, processes

and technology to improve risk management.

We remain focused on client service, the

resilience of our business and wellbeing of

ourcolleagues and we believe our approach

continues to be effective.

Based upon our risk assessment processes,

the board believes that the principal risks and

uncertainties facing the group that could impact

the delivery of our strategic objectives have been

identified below. These risks continue to reflect

our strategic initiatives and transformation

programme, continual enhancements to the

group’s business model in response to

environmental, societal and regulatory

expectations, the evolving cyber threat

landscape, operational resilience in relation to

our supply chain, the importance of our people

and the economic and political environment.

The board remains vigilant to potential risks that

could arise from longer-term trends in society,

the economy and markets, and to regulatory

risks that, in turn, may arise from the continuing

development of law, regulation and standards.

Information about our principal risks is set

outbelow. The risks are mapped out by their

likelihood and impact on a residual risk basis,

having considered the effectiveness of controls

in place to mitigate the risk.

This assessment considers a range of outcomes

that could be experienced, including the

crystallisation of other risks. For some, the

impact of events can also be influenced by

external factors, such as market conditions.

We use ratings of high, medium, low and very low

in our risk assessment. High-risk items are those

that have the potential to impact the delivery of

strategic objectives, with medium, low and very

low rated risks having less impact on the group.

Likelihood is similarly based on a qualitative

assessment.

We consider that the growth of the group

following the combination with IW&I has

proportionately increased the risk profile. The

ratings of the risks below are relative to the new

scale of the organisation.

PRINCIPAL RISKS: RESIDUAL ASSESSMENT

LIKELIHOOD

IMPACT

Low risk Medium risk High risk

Increasing Stable Decreasing New

Risk profile Movement

Suitability

Integration

Pension

Sustainability

Change

People

Third-party supplier

Information security and cyber

Regulatory

compliance and legal

Investment performance

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PRINCIPAL RISKS CONTINUED

RISK AND OWNER CONTROL ENVIRONMENT RISK TREND 2023

CHANGE

The risk that the change portfolio does not support delivery of the

group’s strategy

RISK OWNER: chief operating officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Priority programmes rated red

— Programme overspend

— Executive and board oversight of material change programmes

— Differentiated governance approach to strategic change programmes and

business projects

— Dedicated change delivery function and use of internal and, where required,

external subject matter experts

— Two-stage assessment, challenge and approval of project plans

— Planning and budgeting, monitoring of variances and actions to address.

This risk has increased in 2023 as our digital

transformation programmes moved through critical

delivery milestones. Executive and senior management

oversight has remained agile and focused on targeted

delivery outcomes, benefits realisation, budget

alignment and the impact of change on our risk profile.

INTEGRATION

The risk that the integration of systems, people and processes

fails or is ineffective

RISK OWNER: chief operating officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Budget compliance

— Cost synergy

— Integration project plan

— Executive oversight of integration programme

— Board oversight of programme delivery

— Transformation office programme board oversight and delivery-focused

operating model

— Cost/benefit monitoring

— KRI tracking

— External party appointed to provide independent assurance.

This is a new risk in 2023 as we begin the process of

integrating Rathbones and IW&I businesses.

An Integration Management Office (IMO) was established

in September to coordinate the delivery of our

integration.

The impact of integration on other risks will be

considered throughout 2024.

INVESTMENT PERFORMANCE

The risk that investment performance fails to meet clients’

objectives or expectations

RISK OWNER: managing director Rathbones Investment

Management

RISK PROFILE:

RISK APPETITE MEASURES:

— Actual performance versus performance benchmark

— Portfolio alignment

— Assessment of fund value rating

— Investment policy

— Performance versus benchmarking monitoring

— Defined investment strategy

— Exception reporting

— Product and proposition oversight

— Client engagement and portfolio reviews.

Challenging market conditions are likely to continue in

2024. The position of client portfolios and investment

performance are closely monitored.

2023 OVERVIEW

Throughout 2023 the principal risk profile has

been relatively stable. We have reflected on both

Rathbones’ internal and external environment

over the course of 2023 and have made some

adjustments to the principal risks for 2024. We

have removed credit as it is no longer a material

concern due to the nature of our exposures. We

Low Medium High

Increasing Stable Decreasing New

Risk profile Risk trend

have introduced a new risk, integration, in

recognition of the recent completion of the

combination with IW&I UK. We foresee this

riskto be ongoing into 2024 and 2025. In light

ofmacroeconomic conditions and changes in

theregulatory landscape the prominence of

investment performance has increased therefore

this has been added. Change risk was a

significant risk in 2023 and this remains the

casefor the year ahead. Rathbones’ digital

transformation continues to be a strategic

imperative. Our remaining risks remained stable

throughout 2023, with suitability risk reducing

following extensive investment in the

development of policies, procedures

andoversight.

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83RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

PRINCIPAL RISKS CONTINUED

RISK AND OWNER CONTROL ENVIRONMENT RISK TREND 2023

PENSION

The risk that the cost of funding our defined benefit pension

schemes increases, or their valuation affects dividends, reserves

and regulatory own funds

RISK OWNER: chief financial officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Pillar 2A Net Stressed deficit

— IFRS deficit

— Board, senior management and trustee oversight

— Monthly valuation estimates

— Triennial independent actuarial valuations

— Investment policy

— Senior management review and defined management actions

— An nua l ICA A P.

The group continues to work with the pension scheme

trustees and advisers to manage this risk.

REGULATORY COMPLIANCE AND LEGAL

The risk of failure by the group or a subsidiary to fulfil its

regulatory or legal requirements and comply with the

introduction of new or updated regulations and laws

RISK OWNER: group chief executive officer and

chief risk officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Compliance monitoring review outcomes

— Regulatory review outcomes

— Complaints data

— Board and executive oversight

— Management oversight and active involvement with industry bodies

— Compliance monitoring programme to examine the control of key

regulatoryrisks

— Separate anti-money laundering function with specific responsibility

— Oversight of industry and regulatory developments

— Documented policies and procedures

— Employee training and development

— Panel of external legal advisers

— Whistleblowing policy and process.

While this risk has remained stable in 2023, the

landscape and expectations on firms and our sector

continue to evolve. We have continued to invest in and

develop our first and second line oversight teams,

including the deployment of software to support

regulatory compliance.

The introduction of Consumer Duty in 2023 was a key

priority and its significance continued as new policies,

procedures and governance begun to be embedded.

SUSTAINABILITY

The risk that the business model does not respond sufficiently to

changing market conditions, including environmental and social

factors, such that sustainable growth, market share or profitability

are adversely affected

RISK OWNER: group chief executive officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Net organic growth rate

— Net organic outflow rate

— Climate targets

— Diversity targets

— Board, executive and responsible business committee oversight

— A documented strategy, including responsible investment policy

— Monitoring of strategic risks

— Annual business targets, subject to regular review and challenge

— Regular reviews of pricing structure and client propositions

— Continued investment in the investment process, service standards

andmarketing

— Regular competitor benchmarking and analysis

— Trade body participation

— ESG factors integrated into the investment process

— Dedicated responsible investment project to drive changes to achieve

sustainability goals

— Diversity targets included in risk appetite measures.

2023 has presented challenging market conditions given

the external environment, including a volatile economic

and political landscape.

We do, however, have a strong balance sheet and

recognised market position.

Climate risk has been integrated into our risk

management framework to support the transition to

netzero.

Our stakeholders will become more demanding in

response to evolving expectations of firms to manage

climate and other ESG risks, which remain a key priority

of our responsible business agenda.

Low Medium High

Increasing Stable Decreasing New

Risk profile Risk trend

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84RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

PRINCIPAL RISKS CONTINUED

RISK AND OWNER CONTROL ENVIRONMENT RISK TREND 2023

INFORMATION SECURITY AND CYBER

The risk of inappropriate access to manipulation, or disclosure of,

client or company-sensitive information

RISK OWNER: chief operating officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Number of cyber incidents

— Number of data privacy events

— Cyber external threat landscape rating

— Board and executive oversight

— Data governance committee and information security steering group

oversight

— Information security policy, data protection policy and associated

procedures

— System access controls and encryption

— Penetration testing and multi-layer network security

— Training and employee awareness programmes

— Physical security.

The threat landscape in 2023 continues to be influenced

by the volatile external environment. However, we

continue to invest in our control environment and

resources to improve our security posture and ensure

our infrastructure and employees are well positioned

against an ever-changing threat landscape.

THIRDPARTY SUPPLIER

The risk of one or more third-party suppliers failing to provide or

perform authorised and/or outsourced services to standards

expected by the group, impacting the ability to deliver core

services. This includes intra-group outsourcing activity.

RISK OWNER: chief operating officer and chief executive officer,

Rathbone Asset Management

RISK PROFILE:

RISK APPETITE MEASURES:

— Supplier chain performance

— Board and executive oversight

— Third-party supplier and outsourcing framework

— Senior dedicated relationship managers

— Supplier contracts and defined service level agreements/KPIs

— Supplier due diligence and approval process

— Close liaison, contractual reviews and regular service review meetings

— Documented policy and procedures

— Whistleblowing policy and process.

Our framework for third-party supplier and outsourcing

risk management has continued to be embedded and

developed in 2023. We continue to focus on technology

enhancements to further improve our controls in this

area, which also supports operational resilience. The

change agenda will continue to drive this work as we

on-board new strategic partners.

PEOPLE

The risk of loss of key employees, lack of skilled resources or

inappropriate behaviour or actions. This could lead to lack of

capacity or capability threatening the delivery of business

objectives, or to behaviour leading to complaints, litigation or

regulatory action

RISK OWNER: chief people officer

RISK PROFILE:

RISK APPETITE MEASURES:

— Regretted leavers

— Turnover ratio

— Employee behaviour

— Board and executive oversight

— Succession and contingency planning

— Transparent, consistent and competitive remuneration schemes

— Contractual clauses with restrictive covenants

— Continual investment in employee training and development

— Employee engagement survey

— Appropriate balanced performance measurement system

— Culture monitoring and reporting

— Conduct risk framework and committee

— Training and competence framework

— Whistleblowing policy and process.

We have continued to operate effectively in spite of a

difficult labour market over the past few years.

Continued high inflation and cost of living pressures will

remain a risk driver into next year. Management action,

and our agile approach to support our colleagues, has

been positively received however, we continue to engage

frequently through our employee survey tool. Employee

engagement continues to be positive with satisfaction

scores exceeding the industry benchmarks.

Low Medium High

Increasing Stable Decreasing New

Risk profile Risk trend

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85RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

PRINCIPAL RISKS CONTINUED

RISK AND OWNER CONTROL ENVIRONMENT RISK TREND 2023

SUITABILITY

The risk of an unsuitable client outcome either through service,

investment mandate, investment decisions taken, investment

recommendations made or portfolio or fund construction

RISK OWNER: managing director Rathbones Investment

Management

RISK PROFILE:

RISK APPETITE MEASURES:

— Timely portfolio reviews

— Timely client reviews

— Quality scores

— Board, executive and general managers committee oversight

— Investment governance and structured committee oversight

— Management oversight and segregated quality assurance and

performanceteams

— Performance measurement information and attribution analysis

— ‘Know your client’ (KYC) suitability processes

— Weekly investment management meetings

— Training and competence framework

— Investment manager reviews through supervisor sampling

— Compliance monitoring

— Defined investment mandates and tracking

— Exception reporting

— Complaints analysis.

We have continued to improve processes and oversight

of investment and suitability risk in 2023, focusing on

training, management information and new ways of

working. The successful launch of our ‘Reliance on

Adviser’ proposition in particular has supported the

improvement of this risk. Our ongoing investment in

technology will also further improve suitability

processes and controls in 2024.

Low Medium High

Increasing Stable Decreasing New

Risk profile Risk trend

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86RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ASSESSMENT OF THE

COMPANY’S PROSPECTS

The board reviews its strategic plan annually.

This, alongside the ICAAP and ILAAP, forms the

basis for capital planning which is discussed

periodically with the Prudential Regulation

Authority (PRA).

During the year, the board has considered a

number of stress tests and scenarios which focus

on material or severe but plausible events that

could impact the business and the company’s

financial position. The board also considers the

plans and procedures in place in the event that

contingency funding is required to replenish

regulatory capital or liquidity. On a monthly

basis, critical capital projections and sensitivities

have been refreshed and reviewed, taking into

account current or expected market movements

and business developments.

The board’s assessment considers all the

principal risks identified by the group and

assesses the sufficiency of our response to all

Pillar 1 risks (defined as credit, market and

operational risks, including conduct) to the

required regulatory standards. In addition,

thecrystallisation of the following events

wasconsidered for enhanced stress testing: a

significant fall in the value of FUMA, a loss of

business/competitive threat from a reputational

event, integration risk, business expansion and a

combined FUMA fall and reputational event. The

economic and commercial impacts of the global

pandemic on the prospects of the company were

also factored into the assessment.

The group considers the possible impacts of

serious business interruption as part of its

operational risk assessment process and

remainsmindful of the importance of

maintaining its reputation.

Since the business is almost wholly UK-situated,

it does not suffer from any other material client,

geographical or counterparty concentrations.

While this stress test does not consider all of

therisks that the group may face, the directors

consider that this sever but plausible stress

testing-based assessment of the group’s

prospects is reasonable in the circumstances

ofthe inherent uncertainty involved.

VIABILITY STATEMENT

In accordance with the UK Corporate

Governance Code, the board has assessed the

prospects and viability of the group over a

three-year period considering the risk factors

identified above. The directors have considered

the firm’s current position and the potential

impact of the principal risks and uncertainties

set out above. As part of the viability statement,

the directors confirm that they have carried out a

robust assessment of both the principal risks

facing the group, and stress tests and scenarios

that would threaten the sustainability of its

business model, and its future performance,

solvency or liquidity.

The board regularly reviews business

performance and at least annually its current

strategic plan, alongside a strategic risk

assessment. The board also considers five-year

projections as part of its annual regulatory

reporting cycle, including strategic and

investment plans.

However, the directors have determined and

continue to believe that a three-year period to 31

December 2026 constitutes an appropriate and

prudent period over which to provide its viability

statement given the uncertainties associated

with economic and political factors and their

potential impact on investment markets over a

longer period.

VIABILITY STATEMENT

This three-year view is also more aligned to

thefirm’s detailed stress testing and capital

planning activity. There is no reason to believe

the five-year view would be different but, as

always, there is more uncertainty over a

longertime horizon particularly in relation

toexternal factors.

Stress testing and scenario analysis shows that

the group would remain profitable in excess of

our risk appetite tolerances for capital and

liquidity, and able to withstand the impact of

such scenarios. An example of a mitigating

action in such scenarios would be a reduction

incosts, specifically around change initiatives,

along with a reduction in dividend.

SCENARIOS MODELLED INCLUDE:

— Market-wide stress (capital & liquidity): a

30%fall in FUMA for a one-year period, with

recovery over the following three years and

Foreign Exchange illiquidity

— Idiosyncratic reputational stress (capital &

liquidity): a reputation-affecting cyber event,

social media or ESG-related event causing

outflow of 20% of FUMA together with

associated compensation and rectification

costs. Idiosyncratic integration stress (capital):

a specific stress relating to the planned

integration of IW&I into the group, resulting

inoutflow of 15% of FUMA together with

additional integration costs and cost synergies

not being achieved

— Combined stress (capital and liquidity):

aggregation of the above market-wide and

integration stresses.

Based on this assessment, the directors confirm

that they have a reasonable expectation that the

company will be able to continue in operation

and meet its liabilities as they fall due over the

period to 31 December 2026.

The strategic report contains certain

forward-looking statements, which are made

by the directors in good faith based on the

information available to them at the time

oftheir approval of this annual report.

Statements contained within the strategic

report should be treated with some

cautiondue to the inherent uncertainties

(including but not limited to those arising

from economic, regulatory and business

riskfactors) underlying any such forward-

looking statements. The strategic report

has been prepared by Rathbones Group Plc

to provide information to its shareholders

and should not be relied upon for any

otherpurpose.

Pages 1 to 87 constitute the strategic report,

which was approved by the board and

signed on its behalf by:

Paul Stockton

Group Chief Executive Officer

Iain Hooley Group

Chief Financial Officer

5 March 2024

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87RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

Corporate governance report

Chair’s letter

Corporate governance framework

Board of directors

Compliance with the 2018 UK

corporategovernance code

Board activities 2023

How we are governed

Nomination committee report

102

Audit committee report

107

Group risk committee report

110

Remuneration committee report

124

Annual report on remuneration

136

Directors’ report

139

Statement of directors’ responsibilities

inrespect of the report and accounts

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88RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FURTHER

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FINANCIAL

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STRATEGIC

REPORT

CORPORATE GOVERNANCE REPORT

CHAIR’S LETTER

Clive C R Bannister

Chair

On behalf of the board, it is my pleasure to

present our corporate governance report

for the year ended 31 December 2023.

It summarises the role of the board in

providing eective leadership to promote

the long-term success of the ﬁrm.

BOARD LEADERSHIP AND

COMPANY PURPOSE

The key responsibilities of the board are to

ensure effective leadership, the long-term

sustainability of the firm and the creation of

value for all our stakeholders. The board

recognises that sustainable business success is

not possible without a clear purpose and that

good governance is about more than complying

with rules; it is about culture, behaviours and

how we treat our clients. The board is therefore

committed to ensuring that the firm’s purpose,

values and culture are set by the whole board

and embedded throughout the firm. The

executive directors and management team play

an integral role in this, ensuring that our people

understand the firm’s culture and what is

expected of them to achieve our purpose.

Ibelieve that all this, together with our strong

governance framework, allows the board to

ensure that the whole firm is moving in the right

direction as we execute our strategy. Through

specific dashboards aligned to the key focus

areas of our strategy, the board can monitor

andreview progress against targets.

These dashboards are used throughout the

group, ensuring alignment on execution and

targets. Additionally, how the board has

considered the group’s opportunities and

risks,the sustainability of its business model,

and how governance around the group’s risk

management framework contributes to the

delivery of its strategic objectives, is set out

inthe strategic report.

The board also plays a key role in setting the

group’s culture and monitoring how it is being

embedded to ensure alignment with the group’s

business priorities. The board reviews the

culture dashboard which helps monitor and

analyse the firm’s culture. This dashboard

contains five core drivers that help to shape

thefirm’s culture centred around the firm’s

stakeholders. The culture dashboard is updated

every six months and presented to the board for

review and monitoring. In addition, through my

own engagement with employees and through

my colleagues’ workforce engagement

programme, I have been pleased to see the

firm’sstrong and distinctive culture in action,

asshown by the continuing commitment on the

part of our employees to support our clients and

the community.

COMBINATION OF INVESTEC

WEALTH & INVESTMENT

The combination with Investec Wealth &

Investment UK (IW&I) presents us with

manyopportunities. These include the

chancetocapture the benefits of scale that it

willin turn benefit our clients. We were

gratefulfor the overwhelming shareholder

support for the transaction in June. This was

apositive affirmation of this transformational

transaction. To date, good progress is being

madeon integration and we very much look

forward to welcoming the IW&I clients and

newcolleagues to form a significant part of

theenlarged Rathbones group. Our future

focuswill then move to delivering thebenefits

ofthis transaction to all of our stakeholders.

Afullupdate will be provided in thenext

annualreport.

BOARD COMPOSITION

There have been a number of changes to the

board’s composition during the year which

werein line with our succession plans to ensure

successful delivery of the IW&I integration.

Following Sarah Gentleman’s appointment as

Senior Independent Director in 2022, it was

agreed that she would step down as chair of the

remuneration committee to focus on her new

role. As part of the board’s succession planning

programme, Dharmash Mistry was appointed

chair of the remuneration committee as of

1September 2023. Dharmash has been a

member of the remuneration committee since

his appointment as a non-executive director in

2021 and also co-leads our workforce

engagement programme.

Under the terms of the Relationship Agreement

following completion of IW&I combination,

Investec Group Plc is entitled to nominate two

non-executive directors to the board so long as

they hold >20% of the firms shares. Nominated

by Investec Group plc; Ruth Leas and Henrietta

Baldock joined the board as of September 2023.

Ruth was appointed Chief Executive of Investec

Bank Plc in 2019 and has a deep knowledge of

financial services in both the UK and South

Africa. Henrietta was chair and independent

director at IW&I and holds non-executive

directorships at Investec Plc and Legal & General

Group Plc.

In addition, we announced in September 2023

the appointment of Iain Hooley as Group Chief

Financial Officer and Executive Director to the

board with effect from 1 January 2024. Iain has

been Finance Director of Investec Wealth and

Investment Limited (IW&I) for more than a

decade and was appointed CEO of IW&I in

February 2023. Iain has been a key individual in

IW&I’s success and has played an integral role in

the significant growth of the business.

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89RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

BOARD HIGHLIGHTS 2023

COMBINATION OF INVESTEC WEALTH &

INVESTMENT

Read more: See page 99

Iain will take over from Jennifer Mathias, who

will step down from the board, and transition

into the role of chief of staff. On behalf of the

board, I would like to thank Jennifer for her work

on the integration of SHL, support in delivering

the IW&I transaction, her unfailing commitment

and professional as a board member and Group

CFO; I look forward to continuing to work with

her in her new role.

EXECUTIVE REMUNERATION

Executive remuneration remains an important

area of focus and debate, and the board

continues to monitor developments on this topic

closely. As reported last year, the remuneration

committee has spent considerable time and

effort assessing the impact of regulatory changes

that were introduced in 2023 as part of our

triennial remuneration policy review. As a result,

a number of changes are proposed to the

remuneration policy and are proposed for

approval at this year’s AGM. Further information

on the proposed new policy can be found on

pages 115 to 123. Dharmash Mistry, chair of the

remuneration committee, carried out an

extensive consultation exercise with our largest

shareholders before finalising the new policy.

DIVERSITY, EQUALITY AND INCLUSION

The board agrees that greater diversity drives

better decision-making. We strongly believe that

building a diverse and inclusive workforce will

lead to better outcomes for clients, colleagues

and for our business. You can read more about

our approach to building diversity and inclusion

across our workforce and the initiatives that

support it in our responsible business report on

page 58. The board has aligned its diversity

policy for board appointments with new targets

set out in the Listing Rules and is proud to have

met those targets.

In 2023, over 40% of our board was made up of

women, two of our senior board positions were

held by women and we have at least one director

from an ethnic minority background. You can

read more about the policy and the importance

we place on diversity in the recruitment of

non-executive directors and across the

organisation on page 100 of the nomination

committee report.

BOARD EVALUATION

This year, in line with the Code, the board

undertook an internal process to review its

effectiveness and performance. The review

concluded that the board remains strong;

independent and effective; and that it has

responded well to the challenges arising from

the uncertain current economic situation.

Further detail on the evaluation can be found

onpage 98.

STAKEHOLDER ENGAGEMENT

Stakeholder engagement remains a priority for

the board. The board has used formal meetings

and other opportunities to discuss the firm’s

performance and delivery of our strategy. These

discussions included consideration of their

interests, as well as risks arising from the wider

regulatory, economic and political environment.

The board has engaged with shareholders,

customers, employees, regulators and other

groups. You can find our formal statement in

relation to section 172 of the Companies Act

2006, together with further detail in the strategic

report on pages 49 to 57. The board gains a direct

understanding of employees’ views through

employee survey results, townhalls and branch

visits. Separately, the board’s workforce

engagement programme, led by Iain Cummings

and Dharmash Mistry, continued throughout the

year. Details of this initiative can be found on

page 54.

In addition, both my non-executive director

colleagues and I used formal and informal

opportunities to talk to employees across our

offices through virtual events during the year.

Our shareholders are critical to us and the

group’s success. We managed a comprehensive

engagement programme with them throughout

the year especially as part of the IW&I

transaction during 2023. The group finance

director continues to report to the board

regularly on shareholders’ views regarding the

firm, and the firm’s corporate brokers present to

the board on market developments and

shareholder perceptions. This helps to ensure

that the board is fully briefed on the views and

aspirations of shareholders. The firm’s 2023 AGM

was held in our offices in London and was an

excellent opportunity for our board and myself

to meet with all shareholders.

Our relationship with our various regulators is of

fundamental importance to us and we maintain

an open, constructive dialogue with them to

ensure that we are aware of and meet the

standards that they expect. For more

information about how the directors have had

regard to the interests of our key stakeholders

within the context of promoting the success of

the company, please see our section 172

statement on page 49.

This report, in its entirety, has been approved by

the board of directors and signed on its behalf by:

Clive C R Bannister

Chair

5 March 2024

CORPORATE GOVERNANCE REPORT CONTINUED

CHAIR’S LETTER CONTINUED

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90RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CORPORATE GOVERNANCE REPORT CONTINUED

CORPORATE GOVERNANCE FRAMEWORK

Individual

Committee

LEADERSHIP

NOMINATION COMMITTEE

Nomination committee report: See page 99

AUDIT COMMITTEE

Audit committee report: See page 102

GROUP RISK COMMITTEE

Group risk committee report: See page 107

REMUNERATION COMMITTEE

Remuneration committee report: See page 110

CHALLENGE AND OVERSIGHT

THE BOARD

GROUP EXECUTIVE COMMITTEE

— Implements the agreed strategy and the day-to-day

management of the firm

— Reviews and discusses the annual business plan

and budget

— Implements investment process and client proposition

— Approves the expenditure and other financial

commitments within its authority levels, discussing,

formulating and approving proposals to be considered

by the board.

Read more: See page 15

GROUP CHIEF EXECUTIVE OFFICER

— Provides executive leadership and management

to the business

— Responsible for the effectiveness of the

executivecommittee

— Delivers on strategic objectives set by the board

in line with the group’s risk appetite

— Maintains strong relationships with the chairman,

the board and key shareholders and stakeholders.

GROUP CHIEF FINANCIAL OFFICER

— Provides executive leadership and management

to the business

— Responsible for the effectiveness of the

executivecommittee

— Delivers on strategic objectives set by the board

in line with the group’s risk appetite

— Maintains strong relationships with the chairman,

the board and key shareholders and stakeholders.

SENIOR INDEPENDENT DIRECTOR

— Acts as a sounding board for the chairman and serves

as an intermediary for the other directors if required

— Holds meetings with the non-executive directors

(without the chairman present)

— Available to meet with a range of major shareholders

— Develops a balanced understanding of their issues and

concerns and reports the outcome of such meetings

to the board

— Leads the board in the ongoing monitoring and annual

performance evaluation of the chairman.

NONEXECUTIVE DIRECTORS

— Provide constructive challenge to management

performance and strategy

— Contribute to the firm’s strategy

— Provide independent judgement to the board

— Review group financial information and ensure the

system of internal control and risk management

framework are appropriate and effective

— Engage with key stakeholders

— Review succession plans for the board and key

senior management.

CHAIR

— Leads the board and sets the agenda for board discussions

— Ensures the board’s effectiveness

— Agrees and sets the firm’s business strategy and

management objectives

— Encourages the presentation of accurate, clear and

timelyinformation

— Promotes effective and constructive discussion

— Chairs the nomination committee, which considers the

composition of the board and its succession plans

— Evaluates the performance of the board, its committees

and individual directors on an annual basis.

STRATEGIC

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91RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

Nomination committee

Audit committee

Risk committee

Remuneration committee

Group executive committee

Committee chair

Clive Bannister

Chair

Paul Stockton

Group Chief

Executive Officer

Jennifer Mathias

Group Chief

Financial Officer

Iain Hooley

Group Chief

Financial Officer

Sarah Gentleman

Senior Independent

Director

APPOINTED: 06/04/2021

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Clive brings a wealth of strategic,

commercial, and financial experience

to the board. He started his career as

abanker at First National Bank of

Boston in 1981 in Boston and London.

In 1984, he joined Booz Allen

Hamilton and became a partner in

their financial consulting practice

in1990.

In 1994, Clive joined HSBC Investment

Bank as director and head of planning

and strategy in London. He moved to

New York in 1996 to be the deputy

CEO of HSBC Inc and head of

Investment Banking in the US. In

1999, he was appointed Chief

Executive of HSBC Group Private

Banking, became a group general

manager in July 2001, and group

managing director in 2006 responsible

for Group Insurance and Asset

Management at HSBC Holdings Plc.

In2011, Clive was appointed as group

CEO of the Phoenix Group, the UK’s

largest life and pensions consolidator.

CURRENT EXTERNAL

APPOINTMENTS

Clive is currently the chair of the

Museum of London and a chair of

Beazley plc.

APPOINTED: 09/05/2019

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Paul was appointed as group chief

executive in May 2019, having served

as managing director of Rathbones

Investment Management from

May2018. He was previously group

finance director from 2008 to 2019.

Paul brings the following key skills to

the board which supports the firm’s

strategy: executive leadership,

financial services and wealth

management, risk management

andregulation.

Paul qualified as a chartered

accountant with

PriceWaterhouseCooper in 1992,

subsequently accepting a position in

New York before returning to London

in 1996. In 1999 he joined Old Mutual

Plc as group financial controller,

becoming finance director of Gerrard

Limited in 2001. In 2005, two years

after the sale of Gerrard, he left to

workinitially for Euroclear and,

subsequently, as a divisional finance

director of the Phoenix Group. He was

formerly a non-executive director of

the Financial Services Compensation

Scheme.

CURRENT EXTERNAL

APPOINTMENTS

Board member of the Personal

Investment Management and Financial

Advice Association (PIMFA) and

Member of the FCA Practitioner Panel.

APPOINTED: 01/04/2019 TO

31/12/2023

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Jennifer joined Rathbones in April

2019 as a group chief financial officer.

With effect from 31 December 2023,

she stepped down from the board to

take on the role of chief of staff.

Jennifer qualified as a chartered

management accountant in 1999. She

started her career at Lloyds Bank on

their finance graduate programme,

and spent over 10 years in senior

finance and risk roles across the

Commercial Banking division of

Lloyds TSB. Following a period

working directly with the Lloyds TSB

Group CFO she went onto to be the

finance director of the Corporate

Banking division following the HBOS

take over.

After completing the integration of

Lloyds and HBOS she joined Coutts as

the global chief finance officer in 2012

and was part of the team that led the

sale of Coutts International to UBP

Bank. In 2015, she moved to EFG

Private Bank (UK), where she was

chieffinance officer and deputy chief

executive officer, where in addition to

finance responsibilities she led the

Treasury and Credit areas.

CURRENT EXTERNAL

APPOINTMENTS

Non-executive director of Welsh

Rugby Union (WRU) board.

APPOINTED: 01/01/2024

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Iain was appointed as group chief

financial officer on 1 January 2024.

Iain served as finance director of

Investec Wealth & Investment Limited

(IW&I ) for more than a decade and

was appointed CEO of IW&I UK in

February 2023. He brings to his

current role his extensive knowledge

of the sector along with a wealth of

experience of financial and regulatory

reporting, corporate governance and

risk management.

Iain is a fellow chartered accountant

and began his career with Coopers &

Lybrand, which subsequently became

PricewaterhouseCoopers. Working in

the audit practice, Iain had

responsibility for managing a varied

portfolio of audit engagements which

included SMEs and listed companies

across a range of sectors. In 2000, he

joined BWD Securities PLC, which

went on to become IW&I UK, initially

as group financial controller with

responsibility for the management of

the group’s internal and external

financial reporting, tax compliance

and other financial matters.

CURRENT EXTERNAL

APPOINTMENTS

None.

APPOINTED: 21/01/2015

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Sarah joined Rathbones board in 2015

and was appointed senior independent

director in 2022. Sarah was chair of

the remuneration committee from

June 2017 and August 2023 and was a

designated non-executive director of

the firm’s workforce engagement

programme between 2019 and 2023.

Sarah brings the following key skills to

the board which supports the firm’s

strategy: banking, digital marketing,

risk management, corporate

governance and regulatory experience.

She started her career as a consultant

at McKinsey & Company and then

subsequently spent several years in

the telecoms and digital sectors,

latterly as chief financial officer of the

LCR Telecom Group. In 1999, she

joined the internet bank Egg, the

internet banking subsidiary of

Prudential, where she was responsible

for business development and strategy.

In 2005, she joined Sanford C.

Bernstein & Co, the institutional

research and trading arm of Alliance

Bernstein, as a banking analyst

covering the European banking sector.

Sarah is also an adviser to early-stage

technology companies

CURRENT EXTERNAL

APPOINTMENTS

Non-executive director of Engine B Ltd

and Molten Ventures Plc

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92RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

Terri Duhon

Non-Executive Director

(Independent)

Iain Cummings

Non-Executive Director

(Independent)

Dharmash Mistry

Non-Executive Director

(Independent)

Henrietta Baldock

Non-Executive Director

Ruth Leas

Non-Executive Director

Ali Johnson

Group Company

Secretary

APPOINTED: 02/07/2018

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Terri is chair of the risk committee.

She has over 25 years of experience

inthe financial market and brings the

following skills to the board: banking,

investment management, risk

management and regulatory

experience.

Terri graduated with a maths degree

from the Massachusetts Institute of

Technology (MIT). She is a non-

executive director of Morgan Stanley

International where she chairs the risk

committee and is chair of Morgan

Stanley Investment Management

Limited. In addition, she is non-

executive director of Wise Plc and

Hanover Investors Ltd, and is an

Associate Fellow at The Saïd Business

School at Oxford University.

Previously, Terri was a board member

of CHAPS Co and Operation Smile UK

and was a founding member of the

Women’s Leadership Group for the

Prince’s Trust. As an executive, Terri

held a number of senior roles at JP

Morgan and ABN AMRO before setting

up her own consultancy firm.

CURRENT EXTERNAL

APPOINTMENTS

Chair of Morgan Stanley Investment

Management Ltd, non-executive

director of Morgan Stanley

International Ltd, Hanover Investors

Ltd and Wise Plc.

APPOINTED: 05/10/2021

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Iain is chair of the audit committee

and co-leads the firm’s workforce

engagement programme with

Dharmash Mistry.

To support the firm’s strategy, he

brings a wealth of audit and accounting

regulatory reporting experience,

financial services, corporate

governance and risk management.

Iain is a Fellow of the Institute of

Chartered Accountants in England &

Wales with over 36 years of experience

working in the financial sector. He was

a partner at KPMG for over 24 years

working with banks and other major

financial services firms in both audit

and advisory roles including three

years leading KPMG’s banking audit

practice. His audit roles included large

firms in the investment banking sector

and listed firms in the wealth, asset

management and insurance sectors

while his advisory engagements

focused on aspects of risk, regulation

and internal audit. Iain also served for

a number of years as chairman of the

ICAEW Financial Services Faculty’s

risk and regulation committee and as a

member of the ICAEW’s Technical

Strategy Board.

CURRENT EXTERNAL

APPOINTMENTS

Non-executive director of Skipton

Building Society.

APPOINTED: 05/10/2021

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Dharmash joined Rathbones as a

non-executive director in October

2021, he is a chair of the remuneration

committee, and co-leads the firm’s

workforce engagement programme

with Iain Cummings.

Dharmash brings the following key

skills to the board which support the

firm’s strategy: financial services,

media & technology experience, digital

transformation, private & public market

investing and corporate governance.

He started his career with Procter &

Gamble as a Brand Manager, followed

by a period with Boston Consulting

Group. He spent eight years in the

media as Group Managing Director of

EMAP Consumer Media and EMAP

Performance. He co-led the 2008

delisting of Emap Plc from the FTSE

100. He was formerly a Partner at

Balderton & Lakestar, leading

investments including Revolut, Glovo,

Infarm, Blockchain.com and Lovefilm

amongst others. He co-founded Blow

LTD and served as Chairman & CEO

until its sale in 2021. His previous

non-executive appointments include:

Hargreaves Lansdown Plc, Dixons

Retail Plc, The British Business Bank

and BBC Commercial Holdings.

CURRENT EXTERNAL

APPOINTMENTS

A board member of Halma plc and

TheFA Premier League.

— 

APPOINTED: 21/09/2023

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Henrietta Baldock was appointed as

independent a non-executive director

on 21 September 2023 under the

terms of the Relationship Agreement

following completion of IW&I

combination.

Henrietta has extensive knowledge of

the financial services sector, through

her 25 years’ experience in investment

banking, most recently as chair of the

European Financial Institutions team

at Bank of America Merrill Lynch,

where she advised boards on

significant transactions. In 2021, she

was appointed chair of Investec Wealth

& Investment (UK). Henrietta’s industry

experience demonstrates her valuable

strategic and transformation advisory

skills. Henrietta is a non-executive

director of Legal & General Group PLC,

Hydro Industries Limited, Investec PLC

and Investec Limited.

CURRENT EXTERNAL

APPOINTMENTS

Non-executive director of Legal &

General Group PLC and Hydro

Industries Limited

APPOINTED: 21/09/2023

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Ruth Leas was appointed as

independent a non-executive director

on 21 September 2023 under the

terms of the Relationship Agreement

following completion of IW&I

combination.

Ruth has been with Investec for 25

years having joined in South Africa in

1998. In 2002, she moved to London

where she spent 10 years in client

facing roles and was subsequently

appointed as co-head of US Principal

Finance. She joined the credit team

and was subsequently appointed as

Head of UK Investor Relations. In

2016, she was appointed as an

executive director and head of risk

management and as chief risk officer

in 2017. In 2019, she was appointed as

chief executive officer of Investec

Bank plc, the main banking subsidiary

of Investec plc, which includes

Investec Group’s non-Southern African

operations (including the UK, Channel

Islands, Republic of Ireland, US and

India).

CURRENT EXTERNAL

APPOINTMENTS

Chief executive officer of Investec

Bank plc.

APPOINTED: 01/05/2016

EXPERIENCE, SKILLS AND

CONTRIBUTIONS

Ali joined Rathbones in April 2016 and

was appointed company secretary in

May 2016.

Ali graduated in law and is a fellow of

the Chartered Governance Institute.

He has over 20 years’ experience as a

company secretary in a wide range of

publicly listed companies in the UK

and US. Ali has extensive knowledge

and experience in corporate

governance, executive remuneration,

corporate transactions, stock

exchange listing obligations,

responsible business program,

insurance and employee/ executive

share plans.

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93RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CORPORATE GOVERNANCE REPORT CONTINUED

COMPLIANCE WITH THE 2018 UK CORPORATE GOVERNANCE CODE

During the ﬁnancial year ended 31 December 2023, the board has applied the Principles

and complied with the Provisions of the UK Corporate Governance Code 2018 (the Code)

and additional information can be found below:

SECTION 1: BOARD LEADERSHIP

AND COMPANY PURPOSE Page

Effective and entrepreneurial Board to

promote the long-term sustainable

success of the Company, generating

value for shareholders and

contributing to wider society

Purpose, values and strategy with

alignment to culture

Resources for the Company to meet its

objectives and measure performance.

Controls framework for management

and assessment of risks

Effective engagement with

shareholders and stakeholders

Consistency of workforce policies and

practices to support long-term

sustainable success

•

Chairman’s letter

•

Strategic Report

•

Board engagement with key

stakeholders

•

Shareholder engagement

•

Audit Committee report

102

•

Risk Committee report

107

•

Conflicts of interest

101

SECTION 2: DIVISION

OF RESPONSIBILITIES Page

Leadership of Board by chair

Board composition and

responsibilities

Role of non-Executive Directors

Company secretary, policies,

processes, information, time and

resources

•

Board composition

•

Key roles and responsibilities

•

General qualifications required of all

Directors

101

•

Information and training

•

Board appointments and succession

planning

SECTION 3: COMPOSITION,

SUCCESSION AND EVALUATION Page

Board appointments and succession

plans for board and senior

management and promotion of

diversity

Skills, experience and knowledge of

board and length of service of board as

a whole

Annual evaluation of Board and

Directors and demonstration of

whether each Director continues to

contribute effectively

•

Board composition

100

•

Diversity, tenure and experience

100

•

Board, committee and Director

performance evaluation

•

Nomination Committee report

SECTION 4: AUDIT, RISK

AND INTERNAL CONTROLS Page

Independence and effectiveness of

internal and external audit functions

and integrity of financial and narrative

statements

Fair, balanced and understandable

assessment of the Company’s position

and prospects

Risk management and internal control

framework and principal risks

Company is willing to take to achieve

its long-term objectives

•

Audit Committee report

102

•

Risk Committee report

107

•

Strategic Report

•

Fair, balanced and understandable

Annual Report

103

•

Going concern basis of accounting

103

•

Viability statement

SECTION 5: REMUNERATION Page

Remuneration policies and practices

to support strategy and promote

long-term sustainable success with

executive remuneration aligned to

Company purpose and values

Procedure for Executive Director and

senior management remuneration

Authorisation of remuneration

outcomes

•

Remuneration Committee report

110

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94RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CORPORATE GOVERNANCE REPORT CONTINUED

BOARD ACTIVITIES 2023

BREAKDOWN OF BOARD ACTIVITIES

Strategy

1 2 4

— Extensive discussion and assessment of the

transaction with Investec bearing in mind

theimpact on the firm’s various stakeholders

— Oversight and monitoring of the Integration

ofIW&I through various workstreams with a

focus on achieving synergies

— Held a strategy day focused on strategic matters

including the integration of IW&I, digital

solutions, financial advice and the future

clientneeds

— Reviewed the competitive landscape

— Reviewed and approved the group’s budget

andthree-year strategic plan

— Received deep-dive reviews of selected

business areas

— Assessed the firm’s change management

processes and project delivery

— Monitored delivery of the firm’s new digital

strategy including associated expenditure

— Regularly assessed inorganic opportunities

— Assessed the firm’s real estate requirements

over the next three years.

Structure, Capital and Liquidity

1 2 4

— Reviewed the group’s stress testing policy

— Reviewed the group’s treasury policy

— Considered the group’s capital strategy

— Approved the group’s capital and liquidity

planning.

Financial and Corporate Reporting

1 2 4

— Monitored the firm’s performance against its

strategic objectives

— Focused on delivery of organic growth

initiatives through new products

— Monitored the integration of Saunderson House

and financial performance against the plan and

market expectations

— Approved interim and full-year financial

statements, interim dividend and

recommended final dividend

— Received reports from the group’s internal

audit function

— Reviewed the new disclosure framework to

ensure compliance with TCFD reporting.

Governance

— Discussed the key themes and outcomes from

the various workforce engagement

mechanisms

— Assessed and oversaw the firm’s culture and

implementation of its culture dashboard

— Completed an internal board evaluation

exercise and implemented recommendations

— Completed a review of governance

arrangements following completion of the

transaction with IW&I

— Undertook a review of, and approved an

appropriate increase in, non-executive director

fees to align with the market.

Stakeholders

1 4

— Received regular updates on clients including

survey results

— Regularly monitored morale across the firm

with oversight of employee survey results

andassociated management actions

— Reviewed periodic updates on the culture

dashboard

— Received regular feedback on investor relations

activities including meetings with shareholders

and post-results roadshows

— Engagement with various teams and visits to

our Liverpool and Glasgow offices

— Approved the annual Modern Slavery

Statement

— Oversight and approval of remuneration

arrangements for executive directors and the

wider workforce

— Monitored the firm’s people and DE&I strategy.

Regulatory and Compliance

1 4

— Received updates from management on

meetings held with the PRA and FCA during

the year to discuss, amongst other topics,

securities issuances and liquidity

— Received updates on Consumer Duty

implementation

— Approved the group Recovery Plan, designed

tomaintain the viability and the financial

position of the group through an effective and

robust set of recovery options in the event of

abroad range of stress scenarios and in

accordance with the recommendations of

thePRA

— Received detailed reports on progress made

against the Annual Compliance Plan

— Received updates from the Money Laundering

Reporting Officers.

Risk Management

1 3

— Approved the firm’s risk framework

andappetite

— Monitored the firm’s principal risks and

compliance programme

— Received detailed reports on significant

regulatory risks and management’s

mitigatingactions

— Discussed and monitored the firm’s

suitabilityprogramme

— Approved the group’s recovery plan

— Approved the annual review of the ICAAP

andILAAP

— Reviewed the group’s risk appetite statements

— Reviewed Pillar 3 disclosures

— Reviewed the group’s principal risks and

considered emerging risks

— Reviewed the group’s whistleblowing policy

and received an update on activity.

Clients

Our people

Shareholders

Our stakeholders

Society and communities

Partners and regulators

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

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95RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

CORPORATE GOVERNANCE REPORT CONTINUED

HOW WE ARE GOVERNED

BOARD MEETINGS

Most scheduled board meetings are preceded

bya board dinner which allows for broader

discussions on particular topics. The board

dinners also provide an opportunity for the

board to meet members of the management

team or to receive training. In the months where

no formal board meeting is scheduled, an

informal meeting of the non-executive directors,

the chair and the chief executive is generally

held. The non-executive directors also have

informal meetings in the absence of the chair or

chief executive. The roles of the chairman, the

chief executive, the senior independent director

and the non-executive directors have been

clearly defined and agreed by the board to

ensure a separation of power and authority.

At every board meeting, the chief executive

updates the board on the implementation of

strategy and recent developments. The group

chief financial officer reviews the financial

performance and forecasts against plan and

market expectations. The chief risk officer

updates the board on key risk areas and any

emerging regulatory issues which impact the

business. The board is updated on shareholder

sentiment and significant changes in the share

committee attend meetings as required to

present and discuss progress in their individual

businesses and functions.

The board held ten additional meetings in the

year to consider the combination of Rathbones

and IW&I transaction.

OPERATIONS OF THE BOARD

The board has a rolling agenda, which ensures

that key matters are addressed. The board held

seven scheduled meetings during the year, a

strategy day and a number of additional formal

and informal meetings. The chair and the

company secretary manage board and

committee meetings and ensure that the board

(and particularly the non-executive directors)

receive appropriate and balanced information.

The company secretary manages the timely

circulation of information to the board. All board

papers are prepared by executives and clearly

indicate any action required. As part of the

annual board evaluation process, board

members provided input on the level and quality

of the information that is provided. In addition,

the company secretary ensures board

procedures are complied with and applicable

rules are followed.

The company secretary facilitates the induction

process for new directors, assists with their

professional development and advises the board

on corporate governance matters and on the

rules and regulations that affect a UK-listed

company. The appointment or removal of the

company secretary is a matter for the board.

INDEPENDENCE, FITNESS & PROPRIETY

The board, on the recommendation of the

nomination committee, considers that all of

thenon-executive directors are independent,

including the chair. Henrietta Baldock and Ruth

Leas are not considered independent as they

were appointed to the board by Investec Group

plc under the terms of the Relationship

Agreement. All board members are required

todisclose any external positions or interests

which might conflict with their directorship of

Rathbones prior to their appointment so that any

potential conflict can be properly assessed. The

board has regard to the fact that experienced

non-executive directors in financial firms are a

valuable resource and may sit on several boards.

Potential conflicts of interest of non-executive

directors can generally be managed by due

process and common sense.

In line with its regulatory obligations, the firm

undertakes annual reviews of the fitness and

propriety of all those in senior manager

functions, including all of the company’s

directors and a number of other senior

executives. This process comprises assessments

of individuals’ honesty, integrity and reputation;

financial soundness; competence and capability;

and continuing professional development. This

year’s reviews have confirmed the fitness and

propriety of all of the company’s directors and

other senior executives who perform senior

manager functions. Consideration of matters

relating to fitness and propriety also form an

important part of the board’s recruitment

process for non-executive directors.

MEETING ATTENDANCE

Board

Nomination

committee

Audit

committee

Risk

committee

Remuneration

committee

Number of meetings held

8 3 4 5 3

Clive Bannister (Chair) 8/8 3/3 − − 3/3

Paul Stockton (CEO) 8/8 − − − −

Sarah Gentleman (SID) 8/8 3/3 4/4 5/5 3/3

Iain Cummings (NED) 8/8 3/3 4/4 5/5 3/3

Terri Duhon (NED) 8/8 3/3 4/4 5/5 3/3

Dharmash Mistry (NED) 8/8 3/3 3/4 4/5 3/3

Henrietta Baldock

2/2 − − − −

Ruth Leas

2/2 − − − −

Former directors

Jennifer Mathias (CFO)

8/8 − − − −

1. Henrietta Baldock and Ruth Leas were appointed on 21 September 2023 as non-executive directors by Investec Bank plc under

the terms of the Relationship Agreement

2. Jennifer Mathias stepped down from the board on 31 December 2023

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96RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

BOARD DEVELOPMENT

The firm is committed to the training and

development of all employees to ensure

professional standards are maintained and

enhanced. All directors are encouraged to update

their skills and any training needs are assessed

as part of the board evaluation process. The

knowledge and familiarity of non-executive

directors with the firm are enhanced by full

access to senior management, in-person visits to

teams in London, Glasgow and Liverpool offices

as well as virtual events held across the country.

The company secretary assists with the

professional development requirements of the

board. In addition, the board receives mandatory

annual training on the following areas:

— Directors’ Prospectus and MAR obligations

— Client Assets and Money (CASS)

— Securities and Exchange Commission (SEC)

obligations

— Internal Capital Adequacy Assessment Process

(ICAAP) and Internal Liquidity Adequacy

Assessment Process (ILAAP)

— Internal Capital and Risk Assessment (ICARA).

CHAIRMAN’S PERFORMANCE

As in previous years, Sarah Gentleman, in

herrole as the senior independent director,

ledthe annual assessment of the chairman’s

performance. This involved discussions with

theother non-executive directors individually,

without the chairman being present, and

consultation with the chief executive. The senior

independent director subsequently provided

feedback to the chairman.

ACCOUNTABILITY

The statement of directors’ responsibility for

preparing the report and accounts is set out at

the end of this governance section. Within this,

the directors have included a statement that the

report and accounts present a fair, balanced and

understandable assessment of the group’s

position and prospects. To help the board

discharge its responsibilities in this area, the

board consulted the audit committee, which

advised on the key considerations to comply

with best practice and the Code’s requirements.

Following the committee’s advice, the board

considered and concluded that:

— the business model and strategy were

clearlydescribed

— the assessment of performance was balanced

— the language used was concise, with clear

linkages to different parts of the document

— an appropriate forward-looking orientation

had been adopted.

RISK MANAGEMENT

In accordance with the Code, the board is

required to monitor the firm’s risk management

and internal control systems on an ongoing basis

and carry out a review of their effectiveness and

report on this review to shareholders. Details of

the company’s ongoing process for identifying,

assessing and managing the principal risks,

including any emerging risks, faced by the firm

are contained in the risk management section on

pages 77 to 86, together with details of those

principal risks and their related mitigating

factors. Whilst the board retains overall

responsibility for the firm’s risk management

and internal control systems, it has delegated

oversight to the audit and group risk committees.

The group’s financial controls framework is

designed to provide assurance that proper

accounting records are adequately maintained

and that financial information used within the

business and for external publication is reliable

and free from material misstatement, thereby

safeguarding the company’s assets.

The board receives regular reports from the chair

of the group risk committee and chief risk officer

on the key risks facing the firm that impact on

operational and financial objectives. This

assessment is completed together with

assurance that the level of risk retained is

consistent with and is being managed in

accordance with the board’s risk appetite. These

reports include current and forward looking

assessments of capital and liquidity adequacy

and a summary ‘risk dashboard’ is presented.

Also, during the year the board reviewed and

approved the operational risk assessment

process for the 2023 ICAAP document, which

includes a capital assessment of financial,

conduct and operational risks.

The board assesses the effectiveness of the firm’s

internal controls on an annual basis and a report

is provided for consideration. The report is

considered one element of the overall assurance

processes, and the board also considers other

sources, which include reports emanating from

first line of defence and second line of defence

assurance teams, including group compliance,

anti-money laundering (AML), as well as

investment risk and information security.

Arisk-based approach drives internal audit

coverage, and, over the course of the year,

reviewwork by the function covers all material

controls across the firm including compliance,

operations and finance. The observations arising

from this work form the basis for the annual

internal audit opinion.

CORPORATE GOVERNANCE REPORT CONTINUED

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CORPORATE GOVERNANCE REPORT CONTINUED

BOARD AND COMMITTEE EVALUATION

YEAR 1: 2021  EXTERNAL EVALUATION YEAR 2: 2022  INTERNAL EVALUATION YEAR 3: 2023  INTERNAL EVALUATION

The full details of the external evaluation completed by IAl,

including the process and its findings, can be found on pages 80 and

81 of our 2021 Annual Report. Below is a summary of the progress

against the actions from the evaluation:

Action and Progress

Status

Competitor analysis

Improved focus on the competitive landscape with

theNEDs feeling better informed on key competitors.

ESG

ESG principles have been further incorporated into

strategy and operations.

Agenda and papers

Agendas reflect the needs of the business and board

and steps taken to shorten papers, such as including

supporting detail in appendices, has improved

theirquality.

Diversity and inclusion

Increased focus on diversity and ensuring that

management succession plans have a diverse

pipelineof talent.

Hybrid meetings

Improvements to technology mean that there is

continued support for maintaining a balance of

bothin-person and virtual or hybrid meetings.

The full details of the internal evaluation, including the process

andits findings, can be found on pages of our 2022 Annual Report.

Below is a summary of the progress against the actions from

theevaluation:

Action and Progress

Status

Board papers

Improved structure and format of board papers via new

reporting templates. This ensured concise but effective

executive summaries supported by detailed materials.

This approach was welcomed by both executives and

NEDs which led to better board discussions.

Competitor analysis

Introduced broader set of financial and non-financial

KPIs as part of board materials. This MI helped the

board have full external visibility on peers and

theindustry.

DE&I

Exceeded the Women in Finance Charter commitment

reaching 33% female representation in senior

management by September 2023.

Reported the inclusion dashboards from our

employeesurvey to help understand the sentiment

andactions needed to maintain a DE&I focus. More

todo in this area.

People

Increased focus on diversity and ensuring that

management succession plans have a diverse

pipelineof talent.

As noted above, an internal evaluation was completed and this

process was led by the SID and company secretary with support from

IAL. The overall findings were that the board continued to operate

effectively and there was confidence in the board’s ability to oversee

strategy whilst delivering a transformational transaction. The review

identified many aspects which are working well along with a number

of recommendations for development.

Strengths

— The chairs of the board and committees all facilitate

inclusivediscussions

— The executive directors kept the board fully appraised of progress

on the IW&I transaction, and the NEDs added value to the process

— NEDs feel they received good insight into the organisation, and

they praised the management for their openness on the

challenges being faced

— NEDs continue to engage well with the workforce, and

management have provided them good insight by use of the

culture dashboard

— All the committees continue to function well, the committees

arewell chaired and the meeting process was described as well

established.

— The Secretariat provided excellent support to the board and

itscommittees.

Areas of focus

— Monitoring and delivery of the IW&I integration: agree format/

dashboard of regular reporting and ensure the board has

sufficient MI during integration

— Continue to focus on the ‘big picture’ and the future of the firm

aswell as the direction of the industry

— Increased engagement with management: increase the level of 11

meetings between management and the NEDs to ensure board

discussions are better informed and build in additional meetings

between boards to cover topical subjects with management.

The effectiveness of the board, individual

directors and the board’s main committees are

reviewed annually. This ensures that they

continue to operate effectively and are

identifying opportunities for improvement and

best practice, as well as helping to inform future

agenda items and areas of focus. In line with the

Code, this year we again completed an internal

board evaluation which was externally

facilitated by Independent Audit Limited (IAL)

and a questionnaire approach was utilised. this

review addressed the effectiveness of both the

board and its committees. IAL have no

connection with the firm or to our directors. The

review took place following a year of significant

activity, primarily the transaction with Investec

Wealth and Investment UK (IW&I). It was an

opportunity to reflect on how effectively the

board had focused on the transaction and other

strategic initiatives, while also handling

business-as-usual activity. Board members were

requested to complete a questionnaire which

focused on the IW&I transaction, board

dynamics, board meetings, strategy, risk,

competitor analysis, culture, stakeholders, and

committees’ effectiveness. IAL analysed

responses which provided the board with

anonymity as well as added rigour to the process.

A full report was prepared and presented to the

board for discussion.

As we are required by the UK Corporate

Governance Code, the board will undertake an

external effectiveness review every three years

which we will do during 2024. We have provided

below a three year overview of progress.

STRATEGIC

REPORT

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INFORMATION

98RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOMINATION COMMITTEE REPORT

This report sets out an overview of the

committee’s roles, responsibilities and its

keyactivities during the year. Key areas of

focusfor the committee in 2023 were board

composition, succession planning and senior

management succession planning in particular,

in relation to the new group’s needs following

completion of the Investec Wealth & Investment

(IW&I) transaction.

SUCCESSION PLANNING

BOARD

Under the terms of the Relationship Agreement

effective from completion of the combination

with IW&I, Investec Bank Plc will be entitled to

nominate for appointment to the board two

shareholder directors for so long as it holds 20%

or more of the total shares of Rathbones Group

Plc. As part of its consideration of the

combination with IW&I, the board carefully

considered the implications of having

shareholder representative directors on

theboard.

As outlined in the chair’s statement, two new

shareholder representative directors were

appointed to the board following completion

ofthe combination with IW&I: Ruth Leas and

Henrietta Baldock. Both will bring substantial

levels of experience and financial services

expertise to the board. The board believes it

willbenefit from their experience and expertise.

A biography for both Henrietta an Ruth

highlighting their suitability for the role of

non-executive director can be found on page 93

of this report.

Under the terms of the Relationship Agreement

such appointments required the committee’s

approval. The board agreed that shareholder

directors would not be considered independent

under the Code given their relationships with

appointing shareholders. They will not be

appointed to the audit, remuneration or

riskcommittees.

As part of the board’s succession plans, the

committee determined that, following Sarah

Gentleman’s appointment as senior independent

director, a new remuneration committee chair

should be appointed during 2023. Following

extensive discussion by the nomination

committee, it was decided that it would be

preferable to appoint an internal candidate as

they would understand the dynamics of both the

board, the relationship with the executive team,

existing remuneration arrangements across the

firm as well as executive directors. This approach

is in line with the UK Corporate Governance

Code requirements to have at least 12 months

service on the remuneration committee ahead

ofappointment as chair. As part of this process,

Dharmash Mistry was identified as the best

candidate for the role and his appointment was

announced in July 2023.

AT A GLANCE

COMMITTEE MEMBERS AND ATTENDANCE

Member

Meetings

attended

Clive Bannister (Chair) 3/3

Terri Duhon 3/3

Iain Cummings 3/3

Sarah Gentleman 3/3

Dharmash Mistry 3/3

The committee held two additional

meetings in the year to consider succession

planning following Investec Wealth &

Investment (IW&I) transaction.

ROLES AND RESPONSIBILITIES

— The responsibilities of the committee

include reviewing the composition of the

board and making recommendations to

theboard for the appointment of directors.

The board as a whole then decides on any

such appointment

— The committee has responsibilities for

succession planning and the leadership

needs of the organisation, both executive

and non-executive, to ensure the

continued ability of the firm to implement

its strategy and compete effectively in

themarketplace

— Monitoring the firm’s DE&I programme.

Full terms of reference for the committee

are available on the company’s website.

Clive Bannister

Chair of the Nomination Committee

KEY ACTIVITIES IN 2023

The key activities of the committee were:

BOARD SUCCESSION

— assessed the suitability of the proposed

shareholder nominated non-executive

directors and recommended their

appointment to the board

— led the selection and appointment

processof the group chief financial

officerand recommended the

appointment to the board

— reviewed the independence of the

non-executive directors and the

board’sbalance of skills, knowledge

andexperience

— assessed the contribution and time

commitment of the non-executive

directors.

MANAGEMENT SUCCESSION

— reviewed the composition of the

groupexecutive committee following

completion of the IW&I transaction.

DIVERSITY, EQUALITY AND INCLUSION

— reviewed and challenged management’s

implementation of the firm’s DE&I

strategy to ensure progress.

STRATEGIC

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99RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

The firm announced in September 2023, that

Iain Hooley would be appointed chief financial

Officer from 1 January 2024 and Jennifer

Mathias would step down from the board on

31December 2023 to transition to the new

position of chief of staff. Iain has been finance

director of (IW&I) for more than a decade and

was appointed CEO of IW&I in February 2023.

Iain has been a key individual in IW&I’s success

and has played an integral role in the significant

growth of the business.

EXECUTIVE MANAGEMENT

In consultation with the chief executive, a

formalreview of the executive committee

members was completed looking at the

capability and potential of incumbents in key

roles to support the combined enlarged group as

well as the integration of the IW&I. As part of this

exercise, succession planning for these and other

key roles across the firm was completed. The

committee approved the appointments to the

combined group executive committee for the

firm and these were announced in November

2023 with further details on page 89.

The committee recognises the importance of

talent development to ensure that the group

continues to attract, retain and develop skilled,

high potential individuals. This will remain an

important focus in the year ahead. During the

year, the committee was updated on the various

initiatives in place across the group to support

talent development at different levels of the

group’s operations. Further information in

relation to the group’s activities in our

responsible business update.

BOARD INDUCTION

Our executive and non-executive directors are

offered a comprehensive and tailored induction

programme to introduce them to the business,

industry and regulatory context. The programme

is based on one-to-one meetings with relevant

executive directors and executive committee

members, the heads of group functions and the

company secretary and covers the areas of

business outlined below. The induction process

is reviewed on a regular basis and is updated and

tailored to ensure it remains appropriate.

Henrietta Baldock and Ruth Leas were appointed

in September 2023, and a comprehensive and

tailored induction programme was provided.

Each induction programme includes meetings

with chair, executive directors, committee

chairs, group executive committee members,

and external auditors.

NOMINATION COMMITTEE REPORT CONTINUED

BOARD DIVERSITY

The board believes that building a diverse and

inclusive workforce is important not just because

it is the right thing to do, but because it is good

for the group’s clients, its business and its

colleagues. The group’s objective is to build a

diverse workforce at all levels and create an

inclusive culture. The board is committed to

creating a culture where people treat each other

with dignity and are encouraged to realise their

full potential. The group’s inclusion and diversity

policy makes clear the group’s aspirations and

commitment; and by defining the roles and

responsibilities that will support it in attaining

these objectives.

Chairman: 11%

Executive: 22%

Non-executive directors

(Independent): 44%

Non-executive directors

(non-independent): 22%

BOARD COMPOSITION

Male: 4

Female: 5

BOARD GENDER DIVERSITY

0–2 years: 57%

3–5 years: 29%

6–8 years: 14%

NONEXECUTIVE DIRECTORS’ TENURE

BOARD ETHNICITY

BOARD INDUCTION PROGRAMME

BUSINESS REVIEW PERFORMANCE AND MARKET POSITIONING

— Strategic direction and priorities

— Business strategy and market analysis

— Risk appetite, principal risks and risk

management framework

— Operations.

— Review of financial and market performance

— Recent analyst and media coverage

— Budget review

— Analysis of shareholder base and

investorperception

— Shareholder engagement.

REGULATORY ENVIRONMENT PEOPLE, CULTURE AND VALUES

— Overview of the group’s key compliance and

regulatory policies

— Recent changes in regulatory landscape and

impact of upcoming regulatory developments

— Hot topics and key priorities.

— Discussion of corporate values and the

firm’sculture

— Key people and succession plans

— Board procedures and governance framework

— Board interaction with key business areas

— Overview of listed company obligations,

reporting and governance framework

— Directors’ duties and responsibilities

— Group DE&I strategy.

White British or other

White (incl other minority

white groups): 89%

Asian/Asian British: 11%

STRATEGIC

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INFORMATION

100RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

The group’s diversity, equality and inclusion

strategy outlines the priority areas of focus

which are currently:

— To build a culture of inclusion where

colleagues feel safe, respected and where

theybelong

— To increase ethnic minority representation,

recognising the need to accelerate progress in

this area

— To maintain our commitment to increase

female representation and close the gender

pay gap.

During the period, the committee reviewed

progress against the group’s inclusion and

diversity strategy and action plan including a

number of key achievements details of which

can be found on page 61 of the strategic report.

The board’s diversity policy is designed to

ensuretransparency and diversity in making

appointments to the board upon the

recommendation of the nomination committee.

The policy recognises the importance of having

directors with a range of relevant experience,

and embraces the benefits derived from having

directors who come from diverse backgrounds.

The gender and ethnicity balance of the board is

taken into consideration when recruiting a new

non-executive director. This is reflected in the

current composition of our board. To achieve

this goal, we only engage with external search

firms which are signatories to the Voluntary

Code of Conduct for Executive Search Firms for

board-level appointments.

The nomination committee reviews and

evaluates the structure, size and composition of

the board and is responsible for identifying and

recommending new directors for appointment.

Board appointments are made following rigorous

consideration by the nomination committee of

the balance of skills, experience, knowledge and

diversity. When considering board composition

the nomination committee reviews best practice,

including the new listing rules relating to

diversity, the findings of the FTSE Women

Leaders Review and the Parker Review.

NONEXECUTIVE DIRECTORS’ SKILLS

As mentioned above, a key responsibility of the

committee is to ensure that the board maintains

a balance of skills, independence, knowledge and

experience appropriate to the operation of the

business and as required to deliver the strategy.

The committee considered and was satisfied by

the skillset and experience of the firm’s

independent and non-independent non-

executive directors, including their extensive

experience in financial services.

INDEPENDENCE AND CONFLICTS

OF INTEREST

At Rathbones, we are fortunate to have such

non-executives, that demonstrate independence,

excellent skill and knowledge of financial

services. I maintain a dialogue with each of my

board colleagues on potential conflicts of

interest and time commitments. I am fully

satisfied that incidents of conflicts of interest

arehandled appropriately by the individual

concerned and the board’s conflict of

interestpolicy.

NOMINATION COMMITTEE REPORT CONTINUED

APPOINTMENT AND REAPPOINTMENT

OF DIRECTORS

Prior to the company’s AGM each year,

thecommittee considers, and makes

recommendations to the board concerning, the

appointment and reappointment of directors,

having regard to their performance, suitability,

time commitment and ability to continue to

contribute to the board.

Following this year’s review in advance of the

2023 AGM, the committee has recommended to

the board that all serving directors at the date of

this report be appointed or reappointed at the

2024 AGM. Sarah Gentleman has served as a

director for more than eight years. The extension

of her term of office has been considered and the

committee has noted her significant contribution

including as remuneration committee chair. The

board, and I as chair, values her knowledge,

experience and continuity.

BOARD EFFECTIVENESS REVIEW

A formal and rigorous evaluation of the board

and committee’s effectiveness was undertaken

during the year as part of the internal board

effectiveness review. The review found that the

committee operated well during the year. Please

see page 98 for more detail.

The committee considers that during the year it

continued to have access to sufficient resources

to enable it to carry out its duties and has

continued to perform effectively.

During the year, the committee reviewed

itsterms of reference to ensure that they

remainappropriate.

FOCUS FOR 2024

Looking ahead to the next financial year, it is

anticipated that the committee will focus on:

— Reviewing and finalising the remaining

outstanding key roles for the combined entity

— Continue to monitor succession planning and

talent pipeline to ensure alignment to the

future strategic needs of the firm

— Continue to deliver our diversity and

inclusionstrategy.

Clive C R Bannister

Chair of the Nomination Committee

5 March 2024

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

101RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

AUDIT COMMITTEE REPORT

Iain Cummings

Chair of the Audit Committee

As chair of the audit committee, it is my pleasure

to present my report on the committee’s

activities for 2023. This report provides an

overview of how the committee has discharged

its responsibilities over the last twelve months.

The board delegates responsibility to the

committee to monitor the integrity of the group’s

financial reporting and the processes and

controls that support it. This includes reviewing

and challenging the appropriateness of

accounting policies, significant issues and

judgements, and the assumptions in support of

the company’s ability to continue as a going

concern and its longer-term viability.

A key aspect of the committee’s role in ensuring

the integrity of the financial reporting is its

oversight of the group’s relationship with the

external auditor. This includes making

recommendations to the board in relation to the

appointment of the external auditor, approving

its scope of work, fees and terms of engagement,

as well as reviewing regularly its independence,

objectivity and effectiveness.

More broadly, the group’s internal control

framework is an essential part of ensuring the

integrity of its financial reporting and other

business operations. The committee oversees

the effectiveness of, and ongoing improvements

to, the group’s internal controls, as well as having

responsibility for monitoring and reviewing

theeffectiveness of the group’s internal audit

function, which provides assurance on

thosecontrols.

The committee has again had a full agenda and

continued to focus on the key matters across its

principal roles and responsibilities. The key areas

of discussion over the past 12 months have

focused on:

— challenging management on their key

accounting judgements across the group

including key areas related to acquisition

accounting, estimates and assumptions on

which they are based on

— overseeing the financial analysis, disclosures

in connection with the financial information

and consents to be included in the Prospectus

relating to the Investec Wealth & Investment

(IW&I) transaction

— assessing the integrity and fair presentation of

the group’s external financial reporting

including climate change disclosures as well

as our TCFD report

— review and approval of the firm’s client assets

sourcebook audit and submission

— maintaining the independence of Deloitte LLP

while using their services to support the IW&I

transaction

— reviewing the maintenance and effectiveness

of the group’s internal control framework.

The committee monitored and reviewed the

activities and performance of internal and

external audit, along with oversight of non-audit

services provided by the external auditor.

AT A GLANCE

COMMITTEE MEMBERS AND ATTENDANCE

Member

Meetings

attended

Iain Cummings (Chair) 4/4

Terri Duhon 4/4

Sarah Gentleman 4/4

Dharmash Mistry 3/4

ROLES AND RESPONSIBILITIES

— Provide oversight of the firm’s financial

performance and reporting,

announcement of results and significant

judgement areas

— Review the firm’s whistleblowing

arrangements and ensure appropriate and

independent investigations on matters

— Review the effectiveness of the firm’s

internal controls and of the internal audit

function

— Oversee the appointment, performance

and remuneration of the external auditor,

including the provision of non-audit

services to the firm.

Full Terms of Reference for the

committee are available on the

Company’s website.

KEY ACTIVITIES IN 2023

REPORTING

— Reviewed and scrutinised the 2023

annual report and preliminary

announcement

— Reviewed the firm’s TCFD report

— Reviewed and challenged the key

judgements for the annual report,

including acquisition accounting

assumptions

— Discussed company’s distributable

reserves and 2023 final dividend

recommendations to the board

— Considered the half year report for 2023

— Reviewed the key judgements and

provisioning for the year end process

— Considered the FRC audit quality external

inspection report for 2022.

EXTERNAL AUDITORS

— Reviewed and approved the reporting

accountant services independence

— Reviewed the firm’s ISAE3402 report

— Reviewed and approved the group’s CASS

submission

— Reviewed and approved audit and

non-audit fees for the year

— Engaged in the succession process of a

new lead audit partner for 2024.

INTERNAL AUDIT

— Reviewed the internal audit effectiveness

self assessment

— Reviewed and approved the internal audit

charter

— Discussed and approved the internal audit

plan for 2023.

WHISTLEBLOWING

— Reviewed and approved the

whistleblowing report and policy.

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

102RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

We received assurance from our internal

effectiveness review and FRC Audit Quality

Review that our external auditors, Deloitte LLP,

continue to perform satisfactorily. Further

details of work in respect of these and other

keyareas are set out in the sections below.

Also, the committee is grateful for the support

ofmanagement and Deloitte, as external

auditor,in ensuring the integrity of the firm’s

financial results.

COMMITTEE MEMBERSHIP

The committee acts independently of

management to ensure the interests of

shareholders are properly protected in relation

tofinancial reporting and internal control. The

committee members bring a diverse range of

experience in finance, risk, control and business,

with particular experience in the financial

services sector. The board has confirmed that

the members of the committee have the

necessary expertise to provide effective

challenge to management; this includes the

chair. The qualification for each of the members

is outlined on pages 92 to 93.

The chair meets with management ahead of

meetings to discuss specific items of focus.

During the course of the year, the committee held

separate sessions with the internal and external

audit teams, without management present.

During the year, I have regular meetings with the

group finance director, company secretary, head

of internal audit and the external audit partner to

discuss key audit-related topics ahead of each

meeting and discuss the agreed agenda.

FINANCIAL REPORTING

ACCOUNTING JUDGEMENTS

The committee spent considerable time

reviewing the interim report and annual report.

The committee discussed and challenged the

key areas of accounting judgement taken by

management in preparing the financial

statements and the external auditor’s work.

Thisalso included consideration of the internal

controls over financial reporting. The committee

noted that there were no new material standards,

or amendments to standards, relevant to the

group that had become effective for the reporting

period. Most of the key judgement areas were

unchanged from the prior year, reflecting

consistency in the firm’s business model and its

approach to financial reporting, but they were

impacted by the first time recognition of IW&I

and its significant impact on goodwill and

intangibles. There was also focus during the

yearon property asset impairment reviews,

where the group expects to vacate its leased

properties earlier than the respective lease

termination dates. The main areas of focus are

outlined below. Each of these matters were

discussed with the external auditor and, where

appropriate, have been addressed in the external

auditor’s report.

ACQUISITION ACCOUNTING

Following completion of the IW&I transaction in

September 2023, the committee reviewed and

assessed the acquisition accounting judgments.

External specialists were engaged to support

management on the purchase price allocation

and lease valuation assumptions which were

discussed and reviewed by the committee.

FAIR, BALANCED AND

UNDERSTANDABLE STATEMENT

On behalf of the board, we reviewed the financial

statements as a whole in order to assess whether

they were fair, balanced and understandable.

Ahead of presentation to the committee, a robust

review process of the annual report from across

the business was conducted to ensure

disclosures were balanced and accurate. In

addition, the committee was provided details of

internal challenge for various areas of disclosure

which improved the integrity of the document

further. We discussed and challenged the

balance and fairness of the overall report with

the executive directors and also considered the

views of the external auditor who completed a

thorough review of the annual report against

ourobligations and financial reporting practice

generally. In addition, the committee considered

the overall presentation of the financial

statements, including the use and prominence of

alternative performance measures, section 172

reporting and corporate governance disclosures,

and were satisfied that the annual report could

be regarded as fair, balanced and understandable

and proposed that the board approve the annual

report in that respect. During this review the

committee carefully considered the clarity and

coherence of disclosures, in particular in respect

of the climate risk.

ALTERNATIVE PERFORMANCE MEASURES (APM)

The committee reviewed and challenged the

APMs that were included in the annual report to

ensure they were appropriate as well as clear.

REVENUE RECOGNITION

The committee reviewed management’s

approach to revenue recognition, highlighting

the key areas where judgement is required across

interest, fee and commission income.

The committee noted the consistency of

approach with prior years and the detailed

assessment that is performed by management

and challenged by Deloitte. The committee also

received assurance on revenue calculations both

internally through its oversight of the group’s

CASS controls and from the external auditor’s

approach to recalculating significant revenue

streams and carrying out sample testing on the

remainder. The committee received assurance

on revenue calculations internally and

considered the external auditors’ reporting in

relation to it’s audit work on the group’s

revenues. The external auditor’s work included

sample testing of the operational transactions

that drive the revenue to assess that these were

being booked in a timely and accurate fashion.

VIABILITY AND GOING CONCERN

The committee assisted the board in

determining the appropriateness of adopting the

going concern basis of accounting and in

performing the assessment of the viability of the

group. The committee reviewed papers from

management in support of the going concern

basis and the longer-term viability of the group.

The committee assessed the proven stability

ofthe group’s business model, which is

supported by:

— a diverse portfolio of businesses

— resilience when subjected to internal

stresstesting

— a strong capital base

— adequate access to liquidity.

The committee discussed the group’s principal

risks which may affect future development,

performance and financial position.

AUDIT COMMITTEE REPORT CONTINUED

STRATEGIC

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STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

103RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

The committee considered projected profitability

and capital ratios along with funding and

liquidity forecasts, over a period of three years; in

addition, it considered changes in the economic,

technological and regulatory environment.

It was noted that the group’s regulatory capital

and liquidity forecasts reflected the impact of

theIW&I acquisition in the year, as well as the

expected costs to achieve and related synergies

over the next three years. Particular focus was

given to the macroeconomic backdrop, including

funding markets and macroeconomic

uncertainty and volatility. Overall the committee

concluded that it remained appropriate to

prepare the accounts on a going concern basis,

advised the board that three years was a suitable

period of review for the viability statement, and

recommended the viability statement to the

board for approval.

INTERNAL APPROVALS

The audit committee has the primary

responsibility for the oversight of the group’s

system of internal controls including controls

over financial reporting and the work of the

internal audit function. The audit committee,

seeks to ensure that the group operates within

aframework of prudent and effective controls

that allow risk to be identified, assessed and

managed. Policies in relation to IFRS and a

financial control framework are in place across

the group. This first line framework supports the

committee to understand and assess the design

and effectiveness of controls over financial

reporting, covering IFRS and alternative

performance measures. During this review,

theaudit committee did not identify any

weaknesses which were determined to be

significant to the preparation of the financial

statements. Where areas for improvement were

identified, processes are in place to ensure that

the necessary actions are taken and progress is

monitored by the audit committee.

IMPAIRMENT OF GOODWILL AND CLIENT

RELATIONSHIP INTANGIBLES

The committee was presented with the annual

goodwill impairment review and annual client

relationship intangible reviews relating to the

group’s business combinations. The committee

was satisfied there was no impairment with

respect to goodwill.

The client relationship intangible impairment

reviews found that, whilst some of the group’s

client relationships experienced a failure in one

of three triggers that management use to test for

an indication of impairment, a full impairment

assessment was undertaken on all of these,

where discounted cash flow forecasts for the

client relationships were produced, and these all

calculated a value-in-use greater than the

carrying amount of the assets at year end.

A detailed presentation on the impairment

indicators, methodology and underlying

assumptions was reviewed. The committee

challenged the appropriateness of the

assessments, including discussing the outcome

with the firm’s external auditor, and concluded

the approach was reasonable. The committee

was therefore satisfied that no impairment

existed at the year end.

IMPAIRMENT OF PROPERTY ASSETS

As part of the combination of Rathbones group

with IW&I, the group’s property portfolio was

reviewed, and properties that will be vacated

earlier than the original lease contracts

permitted were identified. The impact on IFRS

16 and IAS 36 from expected lease breaks and

terminations, as well as possible lease

assignments and sub-lets was considered.

The property assets relating to leases the

groupexpects to terminate early were reviewed

for impairment.

The assets’ useful lives were revised, and their

recoverable amounts were determined. Any

impairment and accelerated depreciation

charges were recognised in the year outside

ofoperating profit.

THE VALUATION OF DEFINED BENEFIT PENSION

OBLIGATIONS

The committee reviewed the key assumptions

supporting the valuation of defined benefit

pension obligations, particularly salary

increases, investment returns, inflation and the

discount rate, which are disclosed in note 29

tothe financial statements. We reviewed the

professional advice taken by the company and

discussed the assumptions used by us and by

other companies with the external auditor. We

satisfied ourselves that the assumptions used

were reasonable and consistent with the

requirements of IAS 19.

WHISTLEBLOWING CHAMPION

The group is committed to creating a culture of

openness, integrity and accountability. A formal

policy is in place which encourages colleagues

and contractors to raise concerns, in confidence,

about possible wrongdoing in relation to

financial reporting or other matters. Changes to

the policy require the approval of the board, and

the committee has responsibility for regularly

reviewing the adequacy of arrangements to

ensure the proportionate and independent

investigation of matters raised and appropriate

follow up action. These arrangements are

viewedas an important internal control for the

group and the committee regularly updates the

board on their operation and instances of

concerns raised.

During the period, the committee received

regular reporting on the group’s whistleblowing

arrangements, including management

information on concerns raised and completion

rates for internal training.

TCFD CLIMATE RISK REPORTING

The committee reviewed the firm’s TCFD

climate risk disclosure responsibilities as part

ofthe annual report process for 2023. Our focus

was to ensure that the summary in the annual

report met key statutory and regulatory

obligations with clear cross referencing to

thefull TCFD report on the firm’s website.

RESTORING TRUST IN AUDIT AND

CORPORATE GOVERNANCE

The committee has evaluated the impact of the

Department for Business, Energy and Industry

Strategy (BEIS) consultation and resulting

proposals for restoring trust in audit and

corporate governance on the firm. Whilst these

proposals will not be taken forward by

government, an internal team has been created

to assess best practice that the firm may

implement including an audit and assurance

policy over the next year.

In January 2024, the FRC published an updated

UK Corporate Governance Code 2024. The group

is committed to high standards of corporate

governance and is in support of these changes.

We continue to evaluate the impact of the

updated Code changes on the group and plan to

be compliant by 2025.

RISK MANAGEMENT AND INTERNAL CONTROLS

In conjunction with the risk committee, we have

satisfied ourselves that the group’s internal

control framework is effective and adequately

aligned with the group’s risk profile. We are

satisfied that the internal controls in relation to

the financial reporting process are appropriately

designed and effective in identifying risks faced

by the group. Full details of the internal control

framework are given within the risk

management section on pages 77 to 86.

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104RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

At each meeting we receive a report from the

head of internal audit, and we review major

findings into control weaknesses and

management’s response as well as reviewing the

results of our annual ISAE3402 reporting for

clients. We actively follow-up with management

the rectification of identified control weaknesses.

In addition, the committee receives an

assessment from the risk management function

the key accounting judgements and fraud risk

and controls to assist with the review of the

annual report.

FRC CORRESPONDENCE

In October 2023, the FRC wrote to the group

confirming that it had been included in a sample

for their thematic review covering climate

related metrics, targets and net zero plans. The

group’s climate related disclosures in the 2022

annual report were identified as examples of

good practice by the FRC, but there were also

opportunities for improvement which have been

considered and implemented in the preparation

of the 2023 annual report and our standalone

TCFD report.

INTERNAL AUDIT

INTERNAL AUDIT FUNCTION

The internal audit function is an independent

and objective team designed to add value and

improve the firm’s operations by providing

assurance that, for all areas of the group, the risk

management, governance and internal control

processes are operating effectively. The internal

audit function is the third line of defence within

the controls framework, providing independent

and objective assurance to both senior

management and the audit committee.

As referenced in last years report, a new group

head of internal audit joined the group at the

start of 2023 and this transition went smoothly.

The IA function’s detailed work programme is set

out in a rolling audit plan, which is reviewed and

approved by the committee and a continuous

risk assessment informs the audit planning and

priorities during the year. In doing so, the

committee has ensured that the Plan covers the

group’s key risks, regulatory priorities and

strategic ambitions and aligns with the

assurance activity being carried out by the

group’s second line function and the external

auditor. Any modifications to the plan are

approved by the committee.

During the year, the committee received regular

reports on progress against the Plan, the

responsiveness of management in addressing

recommended actions, and the function’s

requirements for resource and access to

management and information. The committee

uses this information to assess the function’s

effectiveness and to ensure that it is adequately

resourced and fully equipped to fulfil its

mandate and perform in accordance with

theInternal Audit Charter and relevant

professional standards.

Having considered the information provided to

itthroughout the year, the committee remains

satisfied that the quality, experience and

expertise of the function is appropriate and that

it is operating effectively.

In addition, the audit committee approves an

updated internal audit charter, which sets out

the mandate and remit of the function. It

received regular reports on internal audit

activities across the group detailing areas

identified during audits for strengthening across

the group’s risk management and internal

control framework and management’s progress

on remediation of issues.

INTERNAL AUDIT EFFECTIVENESS

The annual Internal Audit assessment, which

found the governance and risk and control

framework of the group to be generally effective,

was received by the committee in accordance

with the Chartered Institute of Internal Auditors’

guidance.

The committee completed its annual review of

the effectiveness of the internal audit function

and its level of independence. The evaluation for

the year under review was completed internally

and supported by feedback from the committee

and management.

The internal audit function was found to be

working well with a good culture of engagement

between management and internal audit.

Inaddition to reviewing the internal audit

function’s effectiveness, the committee assessed

the level of internal audit resource and the

appropriateness of the skills and experience of

the internal audit function. It concluded the

function was adequately resourced with

additional co-source available for specialist

skills. An external evaluataion of the function

will be completed in 2024.

As well as meetings with management, I have

regular meetings on a one-to-one basis with the

group head of internal audit to ensure that any

concerns can be raised in confidence.

EXTERNAL AUDIT

AUDIT WORK 2023

The committee oversees the relationship with

Deloitte LLP, its external auditor, covering

engagement terms, fees and independence. Both

the committee and the external auditor have

policies and procedures designed to protect

independence and objectivity.

Deloitte has been auditor to the group since May

2019 and Manbhinder Rana has been the firm’s

lead partner from this date and will be rotating

off this audit in 2024. During the year, the audit

committee chair has engaged in the succession

planning process to appoint a new lead audit

partner and will oversee a smooth handover

process. Mr Rana attends all committee

meetings.

During the year the committee reviewed the

external audit plan and the resulting findings,

which included control observations and areas of

focus. In particular, the committee reviewed and

challenged reports from Deloitte which outlined

their risk assessments and audit plans (including

their proposed materiality level for the

performance of the annual audit), the status of

their audit work and issues arising from it.

Particular focus was given to their testing of

internal controls, their work on the key

judgement areas and possible audit adjustments.

We can confirm that there are no such material

items remaining unadjusted in the financial

statements. Principal matters discussed with

Deloitte are set out in their report on pages 141

to 150.

The company has complied with the Statutory

Audit Services for Large Companies Market

Investigation (Mandatory Use of Competitive

Tender Processes and Audit Committee

Responsibilities) Order 2014 for the year ended

31 December 2023.

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105RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

EXTERNAL AUDIT EFFECTIVENESS

AND APPOINTMENT

We place great importance on the quality,

effectiveness and independence of the external

audit process. In order to review the external

audit process, including the performance of the

external auditor feedback is gathered from both

committee members and management. This

process was undertaken by internal audit. We

also reviewed the FRC Audit Quality Inspection

report prepared on our external auditor and

discussed this report with the audit partner.

Nomaterial findings were identified from this

inspection. Taking account of all of these inputs,

the committee was satisfied of the effectiveness

of the external audit of the firm.

Looking ahead, subject to shareholder approval,

Deloitte will undertake the audit of the company

and the group for the year ended 31 December

2024. In conformance with the required rules,

provisions and good corporate governance in

respect of audit tendering and rotation, the group

will be required to tender for the external audit

in the 2029 financial year end.

The committee will consider in due course its

plan for the tender.

AUDITOR INDEPENDENCE AND

NONAUDIT SERVICES

The committee assesses the independence and

objectivity, qualifications and effectiveness of

the external auditor on an annual basis as well as

making a recommendation on the

reappointment of the auditor to the board. We

discussed the independence of the external

auditor, the nature of non-audit services supplied

by it and non-audit fee levels relative to the audit

fee. The policy includes prohibited services and

sets a fee guide that aims to achieve a cap of 70%

of the average three year statutory audit fee.

AUDIT COMMITTEE REPORT CONTINUED

The committee’s prior approval is only required

where the fee for an individual non-audit service

is expected to exceed £50000 and it is on the

list of pre-approved services.

As part of the Investec Wealth & Investment UK

transaction, Deloitte were instructed to support

the group in the preparation of the Prospectus

and Circular. The committee approved this

non- audit service as it was an area of work that

would complement Deloitte’s role as our external

auditor whilst ensuring their independence was

not compromised. As a result, the level of

non-audit fees for 2023 increased materially

compared to previous years, but excluding

services required by national legislation, payable

to the auditor in 2023 were £508000. This

represents 69% of the three-year average

statutory audit fee of £727600 (compared to

28% in 2022). Prior to undertaking any non-

audit service, Deloitte also completes its own

independence confirmation processes, which are

approved by the engagement partner. To provide

the committee with oversight in this area, it

submits six-monthly reports on the non-audit

services it has provided.

During the year, the committee also considered

the findings of the FRC’s Audit Quality

Inspection and Supervision on Deloitte and,

inparticular, how Deloitte was addressing the

points raised.

Following a formal assessment of the external

auditor’s independence and objectivity, and

taking into account the views of other key

internal stakeholders, the committee

concludedthat Deloitte continued to be

independent and objective.

We agreed the external auditor’s fees (which

areshown in note 7 to the financial statements)

and reviewed the audit engagement letter.

Wealso had discussions with the external

auditor with no management present to provide

an opportunity for any concerns to be raised

anddiscussed.

RISK MANAGEMENT AND CONTROL

EFFECTIVENESS REVIEW

In conjunction with the risk committee, we

havesatisfied ourselves that the group’s internal

financial control framework is effective and

adequately aligned with the group’s risk profile.

We are satisfied that internal financial controls

are appropriately designed and effective in

identifying risks faced by the group. Full details

of the internal control framework are given

within the risk management section on pages 77

to 86. At each meeting the committee is

presented with a report from the head of internal

audit, and reviews major findings relating to

control weaknesses and management’s response.

In addition, a year-end update was provided to

the Committee covering the Group Financial

Control Framework. Additionally, external audit

firms provided ISAE3402 reports on their testing

of controls over the core operating systems

supporting the Investment Management and

Funds businesses. Finally, external audits were

performed covering controls over client assets

held by regulated entities in the group. The

committee was satisfied that no material

weaknesses were identified and that adequate

steps were being taken to remedy control

deficiencies identified.

FOCUS FOR 2024

As well as considering the standing items of

business, the committee will also focus on the

following areas during 2024:

— measurement and delivery of synergy benefits

— oversee the transition of audit partner

— maintenance of internal controls through the

integration programme.

Iain Cummings

Chair of the Audit Committee

5 March 2024

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106RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

GROUP RISK COMMITTEE REPORT

Terri Duhon

Chair of the Group Risk Committee

As chair of the risk committee, I am pleased to

present the committee’s report on the activities

undertaken in the year under review.

The committee plays a key role in overseeing the

integrity of the robustness of the group’s system

of internal control and financial and risk

management.

The group’s approach to risk management, how

itevaluates and manages the principal risks and

uncertainties the group faces are set out on pages

77 to 86.

The external environment over the last 12

months, of ongoing economic uncertainty,

higher inflation and increased cost of living has

remained. Agenda items at the risk committee

this year have continued to reflect this, including

monitoring our operational risk indicators,

evolving our operational resilience programme

and evolving our various stress scenarios.

We continue to progress against our regulatory

agenda, with a particular focus on Consumer

Duty this year as well as conduct risk, cyber risk

and third-party risk. The committee receives

updates on each of these areas and I remain

confident that we are well positioned to meet the

challenges and uncertainties that each of these

will pose.

The group has been evolving it’s risk control self

assessment process which captures key risks

across various business areas. This year has seen

a significant amount of work on this and the

committee has been kept apprised throughout

the year.

In addition, the committee has regularly

reviewed reports from the risk and compliance

functions on the effectiveness of the processes

that support the management and mitigation of

both principal and emerging risks.

During the year, the group continued to embed

its risk management software that houses all risk

assessments as well as linking to other areas of

the risk framework with regular reports

presented to the risk committee.

The committee also focused on programmes

tofurther align and integrate the group risk

management framework in anticipation of

thecombination with Investec Wealth &

Investment (IW&I).

The year ahead is likely to remain challenging

and we will focus on the integration risk,

operational and digital risks whilst ensuring we

continue to progress against the regulatory

agenda particularly around Consumer Duty.

The following sections set out the committee’s

membership, its key responsibilities and the

principal areas of risk upon which we have

focused during the year.

AT A GLANCE

COMMITTEE MEMBERS AND ATTENDANCE

Member

Meetings

attended

Terri Duhon (Chair) 5/5

Iain Cummings 5/5

Sarah Gentleman 5/5

Dharmash Mistry 4/5

ROLES AND RESPONSIBILITIES

The key activities of the committee are to

provide oversight on the firm’s risk appetite

and framework.

To do this we:

— review and discuss reports from the risk

team on risk appetite issues and advise

the board accordingly

— discuss significant loss events, complaints

and near misses, the lessons learned and

management action taken

— review risk and compliance assessments

undertaken and any resulting internal

control enhancements

— advise the board on the risk aspects of

proposed major strategic change

— review (prior to board approval) key

regulatory submissions including the

Group Internal Capital Adequacy

Assessment Process (ICAAP), and the

Internal Liquidity Adequacy Assessment

Process (ILAAP) documents

— receive reports from first line risk owners

on risk management and improvements

to controls and processes.

Full Terms of Reference for the

committee are available on the

Company’s website.

KEY ACTIVITIES IN 2023

REGULATORY REPORTING

— reviewed and approved the ICAAP 2023

and operational risk scenarios

— reviewed and approved firm’s operational

resilience self-assessment

— approved Pillar 3 public disclosure

document

— reviewed and approved the firm’s annual

anti-money laundering report

— discussed and approved ILAAP liquidity

and funding stress results

— reviewed and approved the firm’s

recovery plan and resolution pack.

MONITORING KEY RISKS

— oversight and delivery of the Group’s

consumer duty obligations

— monitoring of the group’s digital change

programme risks

— discussed the Group’s strategic risk profile

including impact of IW&I transaction

— approved group’s annual review of

riskappetite

— monitored and discussed the group’s

people and culture risk profile

— approved firm’s compliance

monitoringplan.

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107RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

COMMITTEE MEETINGS

Our current members are the independent

non-executive directors, who met formally on

five occasions during the year and informally

three times to review key regulatory reports.

Inaddition to the members of the committee,

standing invitations are extended to the chair,

the executive directors, the chief risk officer, the

chief operating officer, the managing directors

and the head of internal audit. All attend

committee meetings as a matter of course and

inform the committee’s discussions. Other

executive committee members and risk team

members are invited to attend the committee

from time to time as required to present and

advise on reports commissioned.

I frequently meet with the chief risk officer in a

combination of formal and informal sessions

throughout the year. I also meet with senior

management across all divisions of the group

including the risk and compliance division to

discuss the business environment and to gather

their views of emerging risks.

The committee has an agreed annual standing

agenda to cover key risk items in the year, which

are required to be addressed in accordance with

the terms of reference. The committee always

discusses the chief risk officer’s report which

covers the second line risk view, as well as

reports from management which give the first

line risk view. We also then hear about financial

risks, and finally internal audit gives any

thoughts at the end of the meeting to cover the

third line risk view. Prior to each meeting, I agree

the agenda with the chief risk officer and the

company secretary to identify key issues

impacting on the firm that may require the

committee’s attention, which either become ad

hoc agenda items or standing agenda items

depending on the issue.

The committee undertakes a robust assessment

of both the principal and emerging risks facing

the group over the course of the year, and

reviews reports from the risk and compliance

function on the processes that support the

management and mitigation of those risks. As

part of the ongoing review process, a specific

assessment of the principal risks and emerging

risks and uncertainties facing the group is also

carried out by the committee, including those

that would threaten its business model, future

performance, solvency or liquidity.

The committee is also responsible for the inputs,

outputs and the process followed to produce the

following key regulatory reports:

— Internal Liquidity Adequacy Assessment

Process (ILAAP)

— Internal Capital Adequacy Assessment

Process(ICAAP)

— Pillar 3

— Resolution and Recovery.

COMMITTEE TRAINING

Ongoing training is provided to assist committee

members in performing their duties. This year

this included briefing sessions on the

implementation of the FCA’s Consumer Duty,

SEC obligations and pension risk.

RISK REVIEW

The committee has delivered on all of its

planned objectives for the year. The committee

continued its focus on investment risk

throughout the year looking at investment

performance, suitability and governance

enhancements. There has been particular

focusagain this year on the firm’s risk appetite

framework, particularly given the programme of

change that has been delivered during the year.

Our risk management framework underpins our

operational culture to enable a responsive and

forward-looking approach to the risks we face as

a group. During this financial year we conducted

our regular review of principal and emerging

risks, with changes reflected in our risk report on

pages 81 to 86. As ever, the risks posed by the

external environment are multi-faceted and

work on our operational resilience agenda to

manage these has continued apace throughout

the year, with updates to the committee a regular

agenda item. Fraud risk and identification

remain high on our radar and we have benefited

from frequent updates on progress in our cyber

maturity. During this financial year we have

continued to revisit our stress event planning

activities; our annual stress testing exercises

continue to demonstrate our resilience and

sufficient resources of both capital and liquidity.

GROUP RISK COMMITTEE REPORT CONTINUED

DIGITAL CHANGE PROGRAMME

As referenced in our report last year, the

implementation of the group’s digital change

programme was a significant area of focus by the

risk committee during the year. The committee

received and reviewed reports by management

as well as the chief risk officer on the key risks of

this deployment across the group. These risks

will continue to be a material area of focus of the

committee as we move into 2024.

CULTURE AND RISK

The links between culture, risk and

remuneration are fundamental. The chief people

prepares a report on people risk themes on an

annual basis and the chief risk officer provides

aregular risk culture update from a second line

perspective. In addition, the risk committee

chair and chief risk officer have provided input

to the remuneration committee to ensure

behaviours and the management of risk during

the year were considered in remuneration

committee decisions.

Ensuring that we are fully compliant with the

numerous and ever-changing regulatory

requirements for financial services firms

remains challenging. We engage actively with

regulators and industry bodies to ensure that our

compliance framework remains appropriate and

relevant for all of our businesses. Also, our

compliance team works closely with first and

second line colleagues, providing regulatory

advice in support of our business strategies, as

well as shaping policies, delivering training and

conducting assurance reviews.

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108RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

This year has also seen a further evolution and

expansion of our conduct risk reporting to the

entire group to enable further focus on good

client outcomes with regular reporting to the

riskcommittee.

CONSUMER DUTY

During the year, the committee has reviewed

and challenged preparations for the

implementation of the Consumer Duty within

the group. The committee has monitored

progress of the implementation plan and

assurance of the deliverables to ensure all

aspects of the regulations have been considered

and delivery was on track prior to completion of

the annual assessment by 31 July 2023. The

committee has scrutinised the outcomes of

product reviews against requirements and

overseen the ongoing development of data to

ensure monitoring and assurance is in place to

embed the Consumer Duty within the firm. As

aresult of this work, the committee was able to

recommend to the board that the appropriate

assessments and checks had taken place,

including that its future business strategy has

been assessed to ensure it is aligned with its

obligations under the Consumer Duty including

price and value, with only minor enhancements

to client communications identified to further

support good client outcomes. This will remain

an area of focus as both our processes embed

and FCA guidance develops.

RISK APPETITE

There has been particular focus again this

yearon the firm’s risk appetite framework,

particularly given the programme of change that

has been delivered during the year. Also, the

committee continued to focus on conduct risk,

controls and processes, and risk of fraud.

A number of areas of operational and financial

risks were stressed again this year as part of the

annual ICAAP and ILAAP, especially bearing in

mind the increased global economic uncertainty.

Following extensive debate and challenge, the

committee and board were satisfied that the

group’s business model and allocated risk

appetite remained appropriate. This is an

important outcome given the number of

changemanagement programmes underway

across the group.

FOCUS FOR 2024

In reviewing the committee’s priorities for the

coming year, consideration will be given to the

following areas:

— overseeing phase two of the Consumer Duty

programme to ensure the regulatory

expectations are embedded within the

combined firm with continued assurance

inplace

— monitor key risks associated to the integration

of IW&I including embedding a common risk

management framework across the new group

and the development of a shared risk culture

— oversight of the firm’s digital change

programme

— continued focus on the firm’s investment

andsuitability processes

— oversight of the firm’s supplier framework

andmanaging third party risks.

Terri Duhon

Chair of the Group Risk Committee

5 March 2024

GROUP RISK COMMITTEE REPORT CONTINUED

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109RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

REMUNERATION COMMITTEE REPORT

Dharmash Mistry

Chair of the Remuneration Committee

Following my appointment as the chair of the

remuneration committee on 1 September 2023,

Iam pleased to present the Directors’

Remuneration Report for the 2023 financial year.

I would like to place on record my sincere thanks

to my predecessor, Sarah Gentleman, for her

service to the committee and for her support in

ensuring a smooth handover whilst continuing

to be member of the committee. I would also like

to thank my fellow committee members for their

support and contribution to the work of the

committee throughout the year.

This report sets out our pay decisions for the

year, including how we implemented the

Remuneration Policy approved by shareholders

at the 2021 Annual General Meeting (AGM), as

well as our new proposed Director’s

Remuneration Policy (DRR).

2023 PERFORMANCE AND

REMUNERATION OUTCOMES

This year has seen a challenging market

backdrop, with the weaker UK macroeconomic

outlook creating significant uncertainty for

ourclients. Against this volatile backdrop,

thegroup’s well-established business model

enables us to support our clients and our

modelis focused on responsible investing and

maintaining our margin levels. It is supported

bya clearly defined risk appetite and a prudent

approach to managing our business and

financial resources.

As referenced in the chair and chief executive

reports, the combination with Investec Wealth &

Investment (IW&I) that was announced in April

2023 dominated the year. From a remuneration

committee viewpoint, we have carefully

considered the impact of this transaction on the

outcome for the annual bonus and our proposed

Remuneration Policy for the next three years.

The committee has sought to ensure the

executive directors are appropriately motived,

retained and aligned with the experience of our

shareholders. We have provided below an

explanation of the committee’s decisions as a

direct result of the combination with IW&I.

Following the group’s solid financial

performance in the year and strong capital

position, and to reflect our continued confidence

in the business model, the board is proposing a

final dividend of 24p per share. This will result in

a full-year dividend per share of 87p (2022: 84p).

The executive team have delivered a significant

amount of activity aligned with our strategic

priorities and details can be found on page 126.

AT A GLANCE

COMMITTEE MEMBERS AND ATTENDANCE

Member

Meetings

attended

Dharmash Mistry (Chair) 3/3

Clive Bannister 3/3

Terri Duhon 3/3

Iain Cummings 3/3

Sarah Gentleman 3/3

The committee held three additional

meetings in the year to consider the

proposed new remuneration policy and

compensation planning.

ROLES AND RESPONSIBILITIES

— determine and set the firm’s remuneration

philosophy, ensuring that it is aligned

with the business plans and risk appetite

— approve the remuneration policy for

executive directors for final approval by

shareholders and make remuneration

decisions within the policy

— approve total annual remuneration for

executive directors based on

achievements against objectives set by

the committee

— review total annual remuneration for

executive committee members and

material risk takers.

Full Terms of Reference for the

committee are available on the

Company’s website.

KEY ACTIVITIES IN 2023

REMUNERATION POLICY REVIEW

— designed and proposed a new

remuneration policy for the next three-

year cycle

— new policy will focus on integration of

IW&I and achieving financial and

non-financial targets

— engaged and consulted with our

top20shareholders on our new

remuneration policy.

EXECUTIVE REMUNERATION

— reviewed and approved changes to

fixedpay for the CEO during the year

andfor 2024

— assessed and approved the 2023 annual

bonus for executive directors and

members of the executive committee

— assessed the Restricted Share Units (RSU)

vesting underpins

— reviewed the annual risk report on

variable pay targets to ensure alignment

with the firm’s risk appetite

— reviewed and approved remuneration

arrangements as part of group chief

financial officer transition

— reviewed and approved the directors’

remuneration report for shareholders.

WORKFORCE REMUNERATION

— reviewed information on wider workforce

pay including salaries, budgets and

forecasted incentive outcomes

— carried out the annual review of

remuneration for material risk takers

across the firm

— annual review of the general principles of

the regulatory remuneration policy.

STRATEGIC

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INFORMATION

110RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL BONUS OUTCOMES

The 2023 annual bonus was assessed against

two financial measures, underlying profit before

tax and total net organic growth in FUMA. These

are the key indicators of performance used by

the firm and investors, as well as strategic

measures. These specific targets are reviewed

annually to ensure the nature of the targets and

weightings are appropriate to achieve alignment

between the interests of our executive directors,

our strategy and the interests of our

stakeholders.

At the start of the year, the committee set equally

weighted PBT and organic growth measures

(30% each of the annual bonus). When we set

measures and targets for the year, we set these

on the basis of no IW&I transaction. During the

year, the circumstances changed and we

announced to the market on 4 April 2023 of our

intention to combine with IW&I, and this

transaction ultimately completed on

21 September 2023.

The priorities of the board and management

understandably pivoted as a result, to focus on

underlying business performance as measured

through profitability together with the

successful delivery of the transaction. Noting the

delivery of a material amount of inorganic

growth in the year, the committee decided to

re-weight the financial components of the

annual bonus towards PBT increasing this KPI to

40%, with a corresponding de-weighting of

organic growth to 20%. When making this

change the committee were comfortable that the

resulting bonus scorecard was equally as

stretching as when it was initially set.

As stated, 2023 was a challenging year whereby

market conditions impacted the group in terms

of its financial results. Despite this backdrop

management still delivered a robust profitability

outcome. When assessing the outcome against

the bonus measure the committee excluded any

profit delivered by IW&I post transaction – to

ensure the targets and outcome are assessed on

a‘like for like’ basis. This led to an outcome of

£102million, slightly ahead of target. The organic

growth measure was below threshold. Whilst the

IW&I transaction led to inorganic growth of

c.40% of FUMA this is not reflected in the two

financial measures used for bonus measures.

In terms of delivery of our key strategic

objectives, strong progress had been made

during the year which resulted in an outcome of

34% out of a maximum of 40% for this measure.

We have set out in more detail the outcomes

against targets for 2023. After consideration, the

remuneration committee decided that these

outcomes were appropriate and consistent for

the year and no discretionary adjustment was

required.

RESTRICTED STOCK PLAN OUTCOMES

The first RSP is due to vest in May 2024, and the

committee assessed the performance underpin

over the 2020-23 period. In summary, over the

three-year period:

— total dividends paid have increased

— return on Capital Employed (ROCE) was

higherthan our Weighted Average Cost of

Capital (WACC)

— satisfactory operational performance has

beenmaintained

— our risk and control environment was robust

and no significant failings or events have

occurred.

REMUNERATION COMMITTEE REPORT CONTINUED

As such the committee confirmed that the

underpins had been met and therefore the RSP

will vest in full.

2024 DIRECTORS’

REMUNERATION POLICY

Our DRR which was approved at the 2021 AGM

is reaching the end of its three-year lifespan. This

provides us with a unique opportunity to

implement a new policy that has the success of

the combination with IW&I at its core, and which

ensures strong alignment between executive

remuneration outcomes and the successful

implementation of our strategy and delivery of

shareholder value. Our combined business is

now materially larger and more complex, and we

have clear but stretching plans to successfully

integrate these two legacy businesses, deliver

synergies and drive shareholder value.

PROPOSED CHANGES TO OUR

REMUNERATION POLICY

Following the completion of the IW&I

transaction, the group materially increased in

size. This led to a material increase in the roles

and responsibilities of our executive directors. At

the same time, the committee are aware that

delivering shareholder value requires us to

successful integrate these two businesses over

the coming years.

In this context, the committee’s key principle

when conducting this policy review has been to

increase the focus on long term performance,

aligning executive pay with the delivery of

shareholder value from this transaction.

As a result, the main change that we are

proposing is to replace the Restricted Stock Plan

(RSP), which is still a minority practice in the UK

plc market and was introduced three years ago

primarily due to regulatory drivers under CRD V,

with a market aligned Performance Share Plan

(PSP). The PRA’s proposed lifting of restriction in

relation to the ratio of fixed to variable

remuneration also reinforces our preference to

move to a PSP structure.

A summary of the proposed changes to our

remuneration policy is detailed below:

PERFORMANCE SHARE PLAN – AWARD OF UP

TO 200% OF FIXED PAY, ASSESSED OVER A

THREEYEAR PERFORMANCE PERIOD

The PSP award will be assessed against

stretching three-year performance conditions,

delivering stronger alignment with our strategic

objectives by providing the opportunity to

directly link vesting outcomes to delivery of the

integration and strategy, and the realisation of its

benefits for shareholders.

For the 2024 PSP, to ensure strong alignment

with the success of the IW&I deal, the proposed

measures are:

— 30% Relative TSR vs bespoke peer group

— 30% EPS

— 40% Cumulative synergies delivered.

STRATEGIC

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111RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL BONUS – NO CHANGE TO QUANTUM BUT

MINOR CHANGE TO PERFORMANCE ASSESSMENT

The structure and quantum of the annual bonus

will remain unchanged, with a maximum

opportunity of 135% of Fixed Pay. We are

proposing one change, to adjust the weighting of

the financial measures from a minimum of 60%

to a minimum of 50%.

Following the IW&I transaction, and the material

increase in FUMA from c.£60 billion to

c.£100 billion, there is a need to manage the cost

baseline in a disciplined manner and to make a

fast start to integrating these two businesses in

order to achieve scale and synergy benefits of

the deal. By their nature this means the

associated targets are strategic, rather than

financial. The committee set a number of

qualitative and quantitative targets under each

of the strategic measures – which will be

reported on retrospectively.

In combination with the new PSP, these changes

will mean that, for 2024, 80% of the Executives’

total variable pay will be determined directly by

Rathbones’ financial performance, compared

with around 40% under the current scheme.

This provides a highly transparent link between

pay and performance. These financial targets are

directly aligned to creating shareholder value,

and if targets are not met, then executives’

remuneration will be lower than under the

current RSP.

REMUNERATION COMMITTEE REPORT CONTINUED

QUANTUM UNDER OUR PROPOSED

REMUNERATION POLICY

The proposed maximum PSP quantum is set at

200% of fixed pay, representing an increase in

target and maximum pay opportunity on

successful delivery of the integration and strategy.

However, if performance conditions are not met,

pay outcomes will be materially lower than

under the current, more certain, RSP structure.

We carefully considered where to position the

quantum of the PSP, in combination with

decisions taken in relation to fixed pay:

— From a strategic perspective the committee’s

desire was to increase the overall weighting on

long term performance given the focus on

delivering the integration successfully over

the next three years. Despite the significant

increase in roles and responsibilities post

transaction we sought to moderate any fixed

pay increase and provide upside opportunity

through the PSP

— From an overall quantum and pay positioning

perspective, we reviewed various market

benchmarks to ensure our proposals were

consistent with market norms.

We are confident that a maximum PSP of 200%

is appropriate for a company of Rathbones’ size

and complexity, noting the annual bonus at

135% of fixed pay is below market norms.

FIXED PAY OF CHIEF EXECUTIVE OFFICER

As stated above, whilst the combined business

ismaterially larger and more complex, the

committee have sought to primarily make any

increases in executive remuneration through

thePSP, linking any increase in reward to the

delivery of stretching goals. However, for the

CEO a moderate fixed pay increase was deemed

appropriate, to reflect the increased

responsibilities and scope of his role. An increase

of 6% has been applied, effective September 2023.

When finalising our decision, we carefully

considered remuneration benchmarking data of

peers in the context of the new larger business

and the following factors:

— The CEO’s fixed pay is materially below the

median of the FTSE 250 and FTSE 250

financial services

— If the proposed PSP is approved, the CEO’s

total target remuneration will move from

below the lower quartile of the FTSE 250 and

FTSE 250 financial services to between lower

quartile and median.

— Conversely, by market capitalisation,

Rathbones is in the top third of the FTSE 250.

Whilst we are not led by benchmarking, this

comparison gave the committee comfort that the

proposed remuneration levels are consistent

with those in the wider market, and appropriate

following completion of the IW&I transaction.

SHAREHOLDER ENGAGEMENT

The company consulted extensively with major

shareholders and their representative bodies on

remuneration issues, including the development

of this new directors’ remuneration policy and

our approach to fixed pay. The consultation was

well received by investors and their feedback

helped inform the final scheme design. While we

did not consult explicitly with employees on this

new policy, the committee took account of

remuneration policies elsewhere in the group.

Our new remuneration policy will have

immediate effect, subject to approval from our

shareholders. Full details of the proposed

changes to our policy is set out below, with

further details presented on pages 115 and 123.

STRATEGIC

REPORT

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INFORMATION

112RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

REMUNERATION COMMITTEE REPORT CONTINUED

EXECUTIVE DIRECTOR CHANGES

In September 2023, we announced that Jennifer

Mathias would step down from the board as of

31 December 2023 and would transition into the

role of chief of staff. Her pay on stepping down

from the board was determined in accordance

with her service contract and our remuneration

policy. She was eligible to receive a full bonus

reflecting relevant performance for 2023 and her

period of employment this year. The bonus

outcome was carefully considered in the context

of performance in the round prior to stepping

down from the board. As Jennifer remains an

employee of the Group there is no impact on

unvested share awards.

Iain Hooley was appointed to the board as chief

financial officer effective 1 January 2024. His fixed

pay was set at £436800 and variable remuneration

will be in line with our proposed Remuneration

Policy, subject to shareholder approval.

GROUPWIDE EMPLOYEE

REMUNERATION

With regards to the average salary increase

forthe general population, an increase of 35%

was agreed for 2024. The increase reflects the

continuing pressures on wages and the cost

ofliving, driven by the current inflationary

environment, and ensures those most susceptible

to the economic environment are best protected.

The group continues to pay all employees at or

above the national living wage, which is in

excess of the national minimum wage.

ENVIRONMENTAL, SOCIAL AND

GOVERNANCE METRICS

The committee is conscious that shareholders

are increasingly expecting environmental, social

and governance measures (ESG) to be embedded

within remuneration frameworks for senior

management, especially as they align with our

purpose. As part of the review of annual bonus

for 2023, the committee took into account the

firm’s progress towards leveraging our ESG

credentials by integrating responsible investing

across the firm and laying the foundations to

achieving our net zero targets.

FEES AND SALARIES

The committee will continue to keep fixed pay

levels under review, taking into account

workforce pay and policies as per the UK

Corporate Governance Code, the firm’s

performance and the views of shareholders. In

conducting any review of fixed pay levels the

committee will take into account the continued

development of both executives since their

appointment. The remuneration arrangements of

other firms of similar size and complexity are

also reviewed for guidance.

In relation to Paul Stockton’s fixed pay for 2024,

the committee proposes to make a modest

increase of 3% which is below workforce levels.

Non-executive director fees were also reviewed

during the year and it is proposed these are

increased in the year for the first time since 1

January 2020. Full detail on changes to these

fees is on page 128.

CONCLUSION

The remuneration landscape continues to be the

subject of many political and regulatory policy

changes and, as these evolve, the committee will

ensure that our policy and practices remain

compliant, balancing the need to remain

performance-driven and competitive. I welcome

any feedback you may have during the year and

hope to receive your support for the approval of

the remuneration report. I would like to thank

shareholders for the support they have given this

year, and I hope you will recognise and approve

of the changes that have been made and support

our 2023 DRR at the 2024 AGM.

Dharmash Mistry

Chair of the Remuneration Committee

5 March 2024

STRATEGIC

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INFORMATION

113RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

REMUNERATION SUMMARY FOR 2023

ONEYEAR MEASURES

THREEYEAR MEASURES

% of award Achieved

Underlying profit margin 40% 26%

Total net organic Growth in FUMA

20% 0%

Strategic objectives 40% 34%

100% 60%

The RSP was subject to the following underpins: Achieved

ROCE was higher than WACC over

the last 3 years

100%

Total dividends continued to

increase over the last 3 years

100%

Satisfactory operational and risk

management over the last 3 years

100%

34%

26%

40%

20%

REMUNERATION OUTCOMES (£’000)

PAUL STOCKTON

JENNIFER MATHIAS

* Targets and outcomes for 2023 take into consideration

the RSP award that was awarded in 2021

578

534

Minimum

1,399

967

Target

1,711

1,255

Maximum

1,413

765

23*

Actual

390

375

Minimum

943

679

Target

1,154

882

Maximum

956

541

Actual

23*

STRATEGIC

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114RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

PROPOSED REMUNERATION POLICY OVERVIEW

The diagram below illustrates how our proposed Remuneration Policy will operate in 2024. The policy table on pages 116 to 123 set out how this differs from our current Policy.

In summary the proposed Policy:

— ensures strong alignment between executive remuneration outcomes and the successful implementation of our strategy and integration

— better aligns executive remuneration to shareholder value, increasing the % total pay directly linked to financial results from c.40% to c.80% for 2024 and onwards

— creates strong alignment to a common outcome and set of performance targets

— if performance conditions are not met, pay outcomes will be materially lower than under the current, more certain, RSP structure.

CURRENT REMUNERATION

POLICY VERSUS PROPOSED

REMUNERATION POLICY

THRESHOLD

100%

100% 65%

100%

81%

135%

120%

65%

200%

65%

Proposed

Current

Proposed

Current

Proposed

Current

Fixed pay

Bonus RSP/PSP

TARGET

100%

100% 65%

100%

81%

135%

120%

65%

200%

65%

Proposed

Current

Proposed

Current

Proposed

Current

Fixed pay

Bonus RSP/PSP

MAXIMUM

100%

100% 65%

100%

81%

135%

120%

65%

200%

65%

Proposed

Current

Proposed

Current

Proposed

Current

Fixed pay

Bonus RSP/PSP

100%

100% 65%

100%

81%

135%

120%

65%

200%

65%

Proposed

Current

Proposed

Current

Proposed

Current

Fixed pay

Bonus RSP/PSP

2024 ILLUSTRATION OF NEW PSP (PERFORMANCE SHARE PLAN) SCHEME

LINKS TO STRATEGY 2024 MEASURES

PERFORMANCE

SHARE PLAN

(MAX 200%

OF FIXED)

PRE GRANT

COND’S

(100%)

PERFORMANCE

OVER 3 YEARS

SHARES 2YE AR

HOLDING PERIOD

The PSP provides a

structure to align

theinterests of

shareholders

anddirectors in

creating long term

shareholder value.

Financial measures 100%:

— 30% TSR. Direct link to

shareholder value creation.

— 30% EPS. Core measure of

overallprofitability.

— 40% cumulative synergies

delivered.

BONUS

(MAX 135%

OF FIXED)

PAYOUT PROFILE

UNCHANGED

FROM CURRENT

STRUCTURE

(50%)

1/3

RELEASED

The Annual Bonus

rewards short term

performance through

the achievement of

corporate and

individual goals and

aligns the interests of

shareholders and

directors through

theuse of deferral.

Financial measures (50% of total):

— Underlying profit before tax

— Net organic FUMA growth.

Strategic measures (50% of total):

— Strategic measures aligned to

corestrategic pillars; enriching

theclient and adviser proposition

and experience, supporting and

delivering growth, inspiring

ourpeople, and operating

moreefficiently.

1/3

RELEASED

1/3

RELEASED

CASH

(50%)

FIXED PAY

(100%)

PAYOUT PROFILE

UNCHANGED

FROM CURRENT

STRUCTURE

The core, fixed

component of the

package designed

toenable the

recruitment and

retention of high-

calibre individuals.

The review may be influenced by:

— role, experience, and performance

— group performance and wider

market and economic conditions

— pay increases across the group

— an external benchmarking

comparator.

0 1 2 3 4 5

(GRANT YEAR)

STRATEGIC

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FURTHER

INFORMATION

115RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY

This section of the report sets out the 2024

Directors’ Remuneration Policy (DRR) which

willbe put to a binding vote at the Annual

General Meeting (AGM) on 9 May 2024 and,

ifapproved, will apply with effect from the

dateof the 2024 AGM unless a revised Policy

isput to shareholders before then.

The current policy, which was approved by

shareholders in May 2021, can be found on

thecompany’s website.

ALIGNMENT OF POLICY WITH CODE

In determining the Policy, the committee took

into account the principles as set out in the Code,

in addition, the committee ensured that the

proposed policy was transparent, simple and

easily understood, fair and linked group

performance and reward, and to drive the

rightbehaviour, it is aligned to our purpose,

values and group strategy.

CLARITY SIMPLICITY RISK

Our remuneration arrangements are transparent and aligned

with our purpose, values and strategy and our disclosures are

clear to both our shareholders and our employees. Performance

targets are set in line with Group budget plans, reviewed and

tested by the committee.

Our remuneration structures are as simple as they practicably

can be. We follow a standard UK market approach to

remuneration with established variable incentive schemes

that operate on a clear and consistent basis.

Our variable remuneration arrangements take into account risk,

both in determining award quantum and through how awards

are delivered. The remuneration committee retains an overriding

discretion that allows it to adjust formulaic annual bonus

outcomes so as to guard against disproportionate out-turns.

Deferral of the annual bonus into shares, a five-year release

period under the PSP and stretching shareholding requirements

that apply during and post-employment provide a clear link to

the ongoing performance of the group and therefore long-term

alignment with stakeholders. Malus and clawback provisions

apply to all variable pay awards.

PREDICTABILITY PROPORTIONALITY ALIGNMENT TO CULTURE

The range of possible values of rewards and other limits or

discretions can be found in the full policy included in the 2023

remuneration report, and the risk section above refers to limits

andcommittee discretion.

The variable elements of awards are linked to base salary. The

performance targets are closely linked to the corporate, financial,

strategic and other non-financial objectives of the Company. This

enables the committee to reward the executive directors’

contribution to both the annual financial performance and the

achievement of specific objectives of the Company, so that poor

performance cannot be rewarded.

In determining the policy, the committee was clear that this

should drive the right behaviours, reflect our values and support

the Company’s purpose and strategy. The committee will review

the remuneration framework regularly so that it continues to

support our strategy.

STRATEGIC

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INFORMATION

116RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

FIXED PAY

PURPOSE AND LINK TO STRATEGY OPERATION OPPORTUNITY APPLICABLE PERFORMANCE MEASURES RECOVERY

The core, fixed component of the

package designed to enable the

recruitment and retention of

high-calibre individuals

Changes from current policy: none

Fixed pay is reviewed annually and is

compared to fixed pay (consisting of

base salary + pension) levels in other

companies of similar size and

complexity to ensure that a

competitive rate is being paid.

Adjustments may be made at other

times to reflect a change of

responsibility.

There is no maximum fixed pay, but

percentage increases will normally

be no higher than the general level

ofincrease for the wider employee

population, unless there are special

circumstances such as a material

change of responsibilities or where

asalary is significantly below

marketmedian and is being

broughtinto line.

Not applicable. Not applicable.

BENEFITS

PURPOSE AND LINK TO STRATEGY OPERATION OPPORTUNITY APPLICABLE PERFORMANCE MEASURES RECOVERY

Benefits are typically provided to

directors to be generally consistent

with other employees and to

complement the remuneration

package to ensure that it is

sufficiently competitive

Changes from current policy: none

Benefits are set by the committee

and may include, for example:

— private medical insurance for

directors and their dependants

— death in service cover

— Share Incentive Plan free and

matching shares

— Save As You Earn scheme

— annual medicals

— limited legal and professional

advice on company-related matters

— relocation costs.

Benefits make up a small percentage

of total remuneration costs.

Not applicable. Not applicable.

STRATEGIC

REPORT

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REPORT

FURTHER

INFORMATION

117RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

ANNUAL BONUS

PURPOSE AND LINK TO STRATEGY OPERATION OPPORTUNITY APPLICABLE PERFORMANCE MEASURES RECOVERY

The annual bonus rewards short term

performance through the

achievement of corporate and

individual goals and aligns the

interests of shareholders and

directors through the use of deferral.

The performance measures as

described have been selected to

support the controlled delivery of our

business strategy as set out in the

strategic report.

Changes from current policy:

Minimum weighting on financial

metrics reduced from 60% to 50%.

Up to 50% of the Annual Bonus

ispaid in cash and the remainder

(atleast 50%) is deferred into

Rathbones shares, which vest over a

three-year period in equal tranches

of 1/3 perannum.

The committee may award dividend

equivalents on deferred shares in

respect of dividends declared during

the deferral period. If dividend

equivalents cannot be awarded due

to regulations, the number of

deferred bonus shares to be awarded

may be based on a share price

discounted by reference to an

expected dividend yield over the

vesting period.

The committee retains discretion to

make changes to the annual bonus if

required by regulations including but

not limited to the amount deferred,

length of the deferral period,

proportion paid in instruments such

as shares or funds and introduction

of holding periods.

The maximum Annual Bonus award

is 135% of fixed pay.

Target performance is 60% of

maximum.

Threshold performance is 25% of

maximum.

The annual bonus is based on the

remuneration committee’s assessment

of financial and non-financial

performance against a balanced

scorecard of measures, which are

aligned to the company’s strategy.

No less than 50% of the annual bonus

will be based on financial measures.

The remainder will be based on

non-financial performance measured

against strategic objectives.

The performance metrics and range

of outcomes for each financial measure

are set by the committee and reviewed

annually.

Additional considerations

The remuneration committee may

make an adjustment when determining

the level of the annual bonus, including

to zero if appropriate, to take account of

any of the following material events:

— underlying financial performance

— risk management or regulatory

compliance issues

— personal performance.

The remuneration committee may also

make an adjustment when determining

the level of vesting of deferred shares if

there is a material downturn in

financial performance.

This ability to override formulaic

outcomes when determining bonus

outcomes is in addition to the malus and/

or clawback provisions to adjust awards.

All unvested awards will normally

lapse on termination of office unless

the termination was as a “good

leaver”. A ‘good’ leaver is a director

who leaves on retirement, due to

ill-health or disability, on the sale of

the business or in any other

circumstances where the committee

determines good leaver treatment is

appropriate. Treatment for a good

leaver is defined below.

Malus and/or clawback can be

applied at any time up to seven years

from the date of grant in the case of

share awards and seven years from

the payment of cash on cash awards.

The vesting schedule for the share

awards is 1/3 per annum over

threeyears.

Malus and/or clawback can be applied

in certain specified circumstances

including: gross misconduct, material

misstatement of results, where there

has been an error relating to the

determination of variable pay,

material adverse event as determined

by the committee, material failure of

risk management, reputational

damage, or corporate failure.

STRATEGIC

REPORT

FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

118RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

PERFORMANCE SHARE PLAN (PSP)

PURPOSE AND LINK TO STRATEGY OPERATION OPPORTUNITY APPLICABLE PERFORMANCE MEASURES RECOVERY

The PSP provides a structure to align

the interests of shareholders and

directors in creating long term

shareholder value.

Changes from current policy: New

element of remuneration, replacing

the previous Restricted Stock Plan.

An annual award of Rathbones shares,

which vest after three years subject to

achievement of specific performance

conditions. An additional holding

period of at least two years will apply

following vesting.

Notional dividends accrued on PSP

awards may be delivered as shares or

cash at the discretion of the

committee at the same time as the

delivery of vested shares. If dividend

equivalents with respect to the

vesting period cannot be awarded

due to regulations, the number of

shares to be awarded may be based

on a share price discounted by

reference to an expected dividend

yield over the vesting period.

The committee has the discretion to

make changes to its PSP policy where

required under regulations including

but not limited to the length of the

vesting period and retention period.

The maximum PSP award is 200% of

Fixed pay.

The payout for threshold

performance is 25% of maximum.

Awards are granted based on

satisfactory personal and group

financial performance in the year

prior to grant.

The committee has the discretion to

adjust the number of shares vesting

taking into account business,

individual and wider company

performance.

The PSP is based on the remuneration

committee’s assessment of financial and

non-financial performance against a

balanced scorecard of measures, which

are aligned to the company’s strategy.

No less than 60% of the PSP will be

based on financial measures.

The performance metrics and range of

outcomes for each financial measure

are set by the committee and reviewed

annually.

Additional considerations

The remuneration committee may

make an adjustment when determining

the overall award, including to zero if

appropriate, to take account of any of

the following material events:

— underlying financial performance

— risk management or regulatory

compliance issues

— personal performance.

All unvested awards will normally

lapse on termination of office unless

the termination was as a “good

leaver”. A ‘good’ leaver is a director

who leaves on retirement, due to

ill-health or disability, on the sale of

the business or in any other

circumstances where the committee

determines good leaver treatment is

appropriate. Treatment for a good

leaver is defined below.

Malus and/or clawback can be

applied at any time up to seven years

from the date of grant.

Malus and/or clawback can be

applied in certain specified

circumstances including: gross

misconduct, material misstatement

of results, where there has been an

error relating to the determination of

variable pay, material adverse event

as determined by the committee,

material failure of risk management,

or corporate failure.

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119RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

SHAREHOLDING REQUIREMENTS

In order to align the interests of executive directors and shareholders, the executive directors are required to acquire and retain a holding in shares or rights to shares equivalent to the value of 250% of fixed

pay for the CEO and 200% of fixed pay for the CFO within five years of the date of appointment. Shares that count towards these guidelines include shares that are owned outright, vested and not exercised

EIP, SIP, RSP and PSP awards and unvested deferred bonus awards. Awards count towards the shareholding requirement on a notional net of tax basis if relevant.

In addition a post-cessation shareholding requirement applies. Executive directors are required to hold 100% of the in employment requirement (or the executive’s actual shareholding on cessation if lower)

for two years following cessation. This requirement can be disapplied in certain exceptional personal circumstances (e.g. death or disability).

CHAIRMAN AND OTHER NONEXECUTIVE DIRECTORS

BASE FEE

PURPOSE AND LINK TO STRATEGY OPERATION OPPORTUNITY APPLICABLE PERFORMANCE MEASURES RECOVERY

To enable the recruitment of

high-calibre non-executive directors

with the appropriate skills and

experience.

Base fees are reviewed annually by

the board on 1 April and are

compared to fees in other companies

of similar size and complexity to

ensure that the market rate is being

paid. Adjustments may be made at

other times to reflect a change of

responsibility. Fees are paid in cash.

The current base fee as of 1 January

2024 is £195000 for the Chairman

and £65000 for the other non-

executive directors.

Not applicable. Not applicable.

ADDITIONAL RESPONSIBILITY FEE

PURPOSE AND LINK TO STRATEGY OPERATION OPPORTUNITY APPLICABLE PERFORMANCE MEASURES RECOVERY

To recognise the additional

responsibility involved in specific

additional roles including for example

chairing a committee (audit, group

risk and remuneration) or being the

senior independent director.

Additional responsibility fees are

reviewed annually by the board on

1 January.

As of 1 January 2024 the additional

responsibility fee is £20000 per

annum.

Not applicable. Not applicable.

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120RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

DEFINITION OF PERFORMANCE METRICS

The annual bonus performance metrics chosen by the committee are key indicators of performance

used by the business and shareholders. Financial measures incentivise the delivery of strong

financial performance for our shareholders in the relevant financial year, whilst non-financial

measures link executive performance to the delivery of key strategic initiatives and projects that

support the firm’s business plan. For the 2024 annual bonus, performance metrics will be profit

before tax, FUMA growth and strategic measures which are the three core KPIs. The committee

reviews the specific choice of performance metrics for the annual bonus on an annual basis at the

beginning of each financial year to ensure that the nature and weighting of these remain appropriate

to ensure alignment between the interests of our executive directors, our business strategy and the

interests of our clients and shareholders. Further details on how the specific choice of measures for

the 2024 annual bonus links to our strategic goals is provided on page 115.

The targets for these measures are considered annually by the committee and are set to encourage

stretching levels of performance without inadvertently motivating inappropriate behaviour.

Rathbones will prospectively disclose the targets on a retrospective basis as these are considered

commercially sensitive.

For 2024, the PSP measures assess cumulative synergies delivered, EPS and relative TSR. These are

chosen as they directly align to our strategic priorities for the coming three-year period, successfully

delivering the required synergies from the integration of IW&I in order to provide growth and EPS

accretion. The relative TSR measures provides direct alignment between PSP outcomes and the

experience of our shareholders.

THE USE OF DISCRETION

The committee may make minor amendments to the policy set out above (for regulatory, exchange

control, tax or administrative purposes or to take account of a change in legislation) without

obtaining shareholder approval for that amendment. In relation to the new plan, the committee

retains discretion when selecting participants, determining the treatment of leavers, agreeing the

timing of awards and reviewing the balanced scorecard of performance measures, targets and

weightings. The committee reserves the right to retrospectively adjust performance measures and

targets if events (for example, a major acquisition) make them inappropriate. Adjustments will not be

made to make the conditions materially easier to satisfy.

The committee reserves the right to make any remuneration payments, and payments for loss of

office (including exercising any discretions available to it in connection with such payments)

notwithstanding that they are not in line with the policy set out above, where the terms of the

payment were agreed (i) before the policy came into effect or (ii) at a time when the relevant

individual was not a director of the company and, in the opinion of the committee, the payment

wasnot in consideration for the individual becoming a director of the company. For these purposes

‘payments’ include awards of variable remuneration and, in relation to an award over shares,

theassociated terms ‘agreed’ at the time the award is granted.

CONSULTATION

Maintaining a strong alignment between the way in which we create value for our stakeholders and

our remuneration principles, which then apply to executive director and wider pay arrangements,

isan important and conscious priority for the committee. As a result, the company consulted

extensively with major shareholders and their representative bodies on remuneration issues,

including in the development of this new directors’ remuneration Policy. Also, the committee

considered the new policy for executive directors in the context of wider workforce remuneration

policies and outcomes. Our focus on workforce engagement also allows employee views to be heard

directly by the committee. For example, employees speak directly to the remuneration committee

chair and audit committee chair (who is a member of the remuneration committee) as part of our

Workforce Engagement programme. This direct feedback loop is complemented by a number of wide

communication channels where remuneration matters are shared and feedback is sought from

employees. Overall the committee was comfortable that our current approach of linking

remuneration principles to our purpose and considering executive director remuneration alongside

workforce remuneration.

APPOINTMENT OF NEW DIRECTORS

For new executive and non-executive directors, the structure of the package offered will mirror that

provided to current directors under the new directors’ remuneration policy. The package quantum

will depend on the role and the experience and background of the new director. Advice from our

remuneration consultants will be taken to ensure that the package is commensurate with median

market levels for companies of similar size and complexity and taking into account the skills and

experience of the individual appointed. Any future variable award will be made within the 135%

maximum for Annual Bonus and 200% maximum for PSP (subject to shareholder approval).

The company may pay compensation to new directors for remuneration the individual has forfeited

in order to take up the role with Rathbones. Rathbones will ensure that these awards are no more

generous in either amount or terms than the awards they replace. These awards may be structured

differently from awards made under our standard directors’ remuneration policy in order to best

reflect the remuneration being forfeited.

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121RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

SERVICE CONTRACTS AND LETTER OF APPOINTMENT

It is company policy that service contracts should not normally contain notice periods of more than

12 months. Details of the notice periods in the contracts of employment of executive directors

serving during the year are as shown below.

Executive director

Date of

contract

Notice

period

R P Stockton 1 May 2019 12 months

I W Hooley 1 January 2024 6 months

There are no provisions within the contracts to provide automatic payments in excess of payment in

lieu of notice upon termination by the company and no predetermined compensation package exists

in the event of termination of employment. Payment in lieu of notice would include fixed pay and

benefits. There are no provisions for the payment of liquidated damages or any statements in respect

of the duty of mitigation. In the event of entering into a termination agreement, the board will take

steps to impose a legal obligation on the director to mitigate any loss incurred. There are no clauses in

contracts amending employment terms and conditions on a change of control. Executive directors’

contracts of service, which include details of remuneration, are available for inspection at the

company’s registered office and will be available for inspection at the AGM.

Non-executive directors have a letter of appointment rather than a contract of employment and these

are available for inspection at the AGM. As with all other directors, they are required to stand for

re-election annually in accordance with the UK Corporate Governance Code. The effectiveness of the

non-executive directors is subject to an annual assessment. Any term beyond six years is subject to

particularly rigorous review and takes into account the need for progressive refreshing of the board.

The executive directors are responsible for determining the fees of the non-executive directors.

Non-executive director

Date of

appointment

Notice

period

Length of service at

31 December 2023

C C R Bannister 6 April 2021 1 month 2 years, 8 months

S F Gentleman 21 January 2015 1 month 8 years, 11 months

I A Cummings 5 October 2021 1 month 2 years, 2 months

T L Duhon 2 July 2018 1 month 5 years, 5 months

D P Mistry 5 October 2021 1 month 2 years, 2 months

H Baldock 21 September 2023 1 month 3 months

R Leas 21 September 2023 1 month 3 months

PAYMENTS FOR LOSS OF OFFICE

Compensation payments will be determined on a case-by-case basis in the light of current market practice. Compensation will include loss of salary and other contractual benefits (as stated above), but

mitigation will be applied where appropriate.

Any entitlement to annual bonus, deferred shares and RSP awards will depend on whether the individual is treated as a good or bad leaver, in line with the table below.

STATUS DEFINITION TREATMENT

Good leaver Leave for reasons including retirement, ill health,

sale of the business and any other reason as the

committee determines.

— Annual bonus will be awarded pro-rata in the year of departure, subject to performance.

— All unvested deferred shares will be delivered in line with the existing vesting schedule. The committee has the ability to

accelerate vesting to the date of departure in certain exceptional circumstances (e.g. death or disability)

— The default approach is that all unvested RSP/PSP awards will vest at their normal vesting date, subject to the assessment of

performance and pro-rated for time served. Under the rules of the plan the committee has the ability to accelerate vesting

and/or disapply pro-rating in exceptional circumstances.

— No PSP awards will be made in the year of departure, unless the committee decides otherwise at its absolute discretion.

Bad leaver Leave for other reasons unless the committee

determines otherwise.

— Annual bonus will not be awarded in the year of departure. All unvested awards will normally lapse.

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122RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REMUNERATION POLICY CONTINUED

OTHER DIRECTORSHIPS

The board believes that the firm can benefit from experience gained when executive directors hold

non-executive directorships. Executive directors are permitted to hold external appointments and to

receive payments provided such appointments are agreed by the board in advance, there are no

conflicts of interests and the appointment does not lead to deterioration in the executive’s

performance.

CONSIDERATION OF REMUNERATION ACROSS THE FIRM

The committee provides oversight of remuneration structures across the firm, including members of

the group executive committee, material risk takers and the risk and compliance teams. In addition,

the committee reviews on an annual basis total remuneration costs across the firm in light of its short

and longer term financial targets and ongoing sustainability.

The committee is well aware of the remuneration structures across the firm and takes these into

consideration when taking decisions on remuneration for executive directors.

CONSIDERATION OF SHAREHOLDERS’ VIEWS

The remuneration committee has consulted extensively with shareholders and proxy advisors during

2023, in developing this Remuneration Policy. The committee greatly values engagement with our

shareholders and their views have been taken into account in finalising the design of the Policy

presented here.

LEGACY ARRANGEMENTS

Authority is given to the committee to honour previous remuneration awards or arrangements

entered into with current or former directors (such as the payment of a pension or the unwinding of

legacy share schemes). Details of any payments will be set out in the annual report on remuneration

as they arise.

DIFFERENCE BETWEEN DIRECTORS’ REMUNERATION POLICY AND OTHER EMPLOYEES

All employees, including executive directors, benefit from fixed and variable pay, pension and

non-cash benefits. The company operates a number of variable remuneration schemes within the

group, some fully discretionary, others with mechanistic elements in addition to a discretionary

element. Membership of such schemes is defined by status and job type. Only executive committee

members are eligible to benefit from the PSP awards.

ILLUSTRATION OF APPLICATION OF REMUNERATION POLICY

The chart below illustrates the potential total remuneration available under the proposed

Remuneration Policy in different performance scenarios.

— Fixed pay levels are £600000 for CEO and £437000 for the CFO. Benefits are included at the

samevalue as paid in 2023.

— Target opportunity includes fixed pay, 60% of maximum bonus (81% of fixed pay) and 50%

vesting of PSP (100% of fixed pay).

— Maximum opportunity includes fixed pay, 100% of maximum bonus (135% of fixed pay) and

100% vesting of PSP (200% of fixed pay).

— Maximum opportunity with 50% share price growth includes maximum pay and 50% share

increase on PSP shares over the vesting period.

CHIEF FINANCIAL OFFICER (£’000)

Minimum

Target

Maximum

Maximum +50%

share price growth

£439

£1,230

£1,903

£2,340

100%

36%

23%

19%

29%

31%

25%

36%

46%

56%

Fixed pay Annual bonus

PSP

CHIEF EXECUTIVE OFFICER (£’000)

Minimum

Target

Maximum

Maximum +50%

share price growth

Fixed pay Annual bonus

PSP

£603

£1,689

£2,613

£3,213

100%

36%

23%

19%

29%

31%

25%

36%

46%

56%

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123RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL REPORT ON REMUNERATION

REMUNERATION POLICY

The remuneration policy (‘Policy’) was approved at the AGM on 5 May 2021 and can be found on our website. The policy has operated as intended in terms of company performance and quantum. No further

changes have been made to the remuneration policy since it was approved in 2021. This part of the directors’ remuneration report explains how we have implemented our remuneration policy during the

year. This annual report on remuneration is subject to an advisory vote at the 2023 AGM, and the financial information in this part of the remuneration report has been audited where indicated.

ROLE OF REMUNERATION COMMITTEE

The role of the committee is to set the overarching principles of the remuneration policy and provide oversight on remuneration across the firm. Details of the committee’s responsibilities and composition

are noted above. At the invitation of the committee chair, the group chief executive officer and group chief financial officer attend some or all of each meeting. The chief risk officer also advises the

committee on matters relating to remuneration, and attends meetings as required. The company secretary acts as secretary and, with the chairman, agrees the agenda for each meeting. At the end of each

meeting, there is an opportunity for private discussion between committee members without the presence of management. No committee member or attendee is present when matters relating to his or her

own remuneration are discussed. The chairman of the board consults our major shareholders on a regular basis on key issues, including remuneration. A formal consultation exercise was undertaken during

2021 with our major shareholders and shareholder advisory bodies as part of the process of reviewing the remuneration policy. The pay and terms and conditions of employment of employees within the

group are taken into consideration when setting the directors’ remuneration policy and pay of the executive directors. The remuneration committee does not formally consult with employees when setting

the policy, although the employee opinion survey conducted every year includes remuneration as one of the topics surveyed.

UK CORPORATE GOVERNANCE CODE

We continue to be compliant with the executive pay provisions of the 2018 UK Corporate Governance Code.

SINGLE TOTAL FIGURE OF REMUNERATION FOR EACH EXECUTIVE DIRECTOR (AUDITED)

The table below sets out a single figure for the total remuneration received by each executive director for the year ended 31 December 2023 and the prior year:

Fixed pay Variable pay

Fixed pay

£’000

Taxable

benefits and

allowances

£’000

Pensions

£’000

Subtotal

£’000

Annual bonus

£’000

RSP

£’000

SIP

£’000

SAYE

£’000

Subtotal

£’000

Total

£’000

R P Stockton

2023 578 3 0 581 470 353 4 5 832 1413

2022 534 3 0 537 216 0 6 0 222 759

J E Mathias

2023 390 2 0 392 318 237 4 5 564 956

2022 371 2 0 373 152 0 6 0 158 531

1. RSP – this award was made in 2021 and relates to the three-year performance period ending 2023. The award will vest in May 2024 and will be subject to a two-year holding period.

The value of this award was based on the average share price during Q4 2023 of £16.13

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124RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

TAXABLE BENEFITS

Taxable benefits and allowances represent the provision of private medical insurance for executive directors and their dependants on terms consistent with the company’s workforce.

ANNUAL BONUS

Performance is assessed using a combination of measures that are detailed below:

Weight % % of fixed pay

Financial 60 81

Non-financial 40 54

Total 100 135

FINANCIAL

The one-year financial performance measures are two key performance indicators actively used by the business, which are closely aligned to strategy. The one-year financial measures and achievement

levels are provided below:

% of fixed pay

Threshold

(25% of

maximum)

On target

(60% of

maximum) Maximum of Actual

Weighted

payout

(% of

fixed pay)

Financial

Underlying profit before tax (£m)

54 8 76 1000 1126 1018 35

Total net organic growth in funds under management and administration (%) 27 20 44 60 -08 0

The net organic growth in funds under management and administration covers both our Investment Management and Funds businesses.

As outlined in the committee chair’s letter on page 111, whilst the original weightings were 30% / 30% these were adjusted to be 40% / 20% as outlined above. Following the completion of the IW&I

transaction, the priorities of the board and management understandably pivoted to focus on underlying business performance as measured through profitability. Therefore, the committee decided to

re-weight the financial components of the annual bonus towards PBT rather than organic growth.

ANNUAL REPORT ON REMUNERATION CONTINUED

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125RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL REPORT ON REMUNERATION CONTINUED

NONFINANCIAL STRATEGIC

The non-financial strategic measures are designed to drive strategic goals. Details of the performance measures, assessment and outcomes are detailed below:

PERFORMANCE IN 2023 STRATEGIC DRIVER STAKEHOLDER IMPACT OUTCOME

OBJECTIVE: DRIVING GROWTH AND INVESTMENT PERFORMANCE

— Developed the marketing function to achieve lead generation ahead of budget

— Delivered revenue growth from the firm’s financial planning business unit slightly behind budget

— The firm’s client NPS continued to be ahead of peers with a score of 42 in 2023 (40 in 2022)

— Improved client MI and insight dashboard launched

— Greenbank net organic growth of c.3% achieved although behind forecasted budget

— Ensured portfolios were managed to mandate to agreed risk parameters

1 4

Largely achieved

OBJECTIVE: STRATEGIC PROJECT DELIVERY

— Successful launch of the Charles River system

— Delivered c91% of Saunderson House client transfers to Rathbones though slightly below target

— CLM solution delivery resulted in increased expenditure and longer implementation

1 2 3

Partially achieved

OBJECTIVE: PEOPLE AND DEVELOPMENT

— Successful transition of members of the GEC, RAM CEO and appointment of Chief Distribution Officer

— Ensured continuous progress on the firm’s DE&I plans and mobilised networks across the firm

— Maintained strong employee NPS of 37 (15 points ahead of industry benchmark) and high employee engagement

scoresof 8/10

1 2 3

Achieved

OBJECTIVE: INORGANIC GROWTH

— Delivered the IW&I combination

1 2 3

Achieved

OBJECTIVE: RISK AND GOVERNANCE

— Strategy execution in line with the firm’s risk appetite

— Met all Consumer Duty obligations and deadlines

— Implemented risk and compliance system and enhanced investment risk system capability

— Ongoing improvements in the firm’s suitability processes

— Effective and proactive relationships with the firm’s regulators

1 2 3

Achieved

Clients

Our people

Shareholders

Our stakeholders

Society and communities

Partners and regulators

Our strategic priorities

Enriching the client and adviser

proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

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ANNUAL REPORT ON REMUNERATION CONTINUED

PENSIONS

Since 1 January 2021, Paul Stockton and Jennifer Mathias no longer receive a separate pension

allowance and neither is in receipt of a defined benefit pension. All executive directors are eligible for

death in service benefits on terms consistent with the workforce.

SHARE INCENTIVE PLAN (SIP)

This benefit is the value of the matching and free share awards made in the year under the SIP.

executive directors alongside all employees may contribute up to £150 per month to buy partnership

shares with contributions matched on a one-for-one basis by the company. Free share awards are

linked to EPS growth.

SAVE AS YOU EARN (SAYE)

This benefit is the value of the discount on SAYE options granted during the year.

PAYMENTS FOR LOSS OF OFFICE (AUDITED)

As announced on 21 September 2023, Jennifer Mathias stepped down from the board as chief

financial officer as of 31 December 2023 and has now transitioned to her new role as chief of staff.

Jennifer continued to receive her fixed pay and benefits as an executive director until she stepped down

from the board. Jennifer remained eligible to receive an annual bonus for 2023 as outlined above.

As Jennifer is remaining an employee there is no impact on any unvested share awards at this time.

To the extent that Jennifer’s 2022 and 2023 RSP awards vest these will be disclosed as a payment to a

past director in future remuneration reports.

In addition, the firm paid legal and other costs of £30000 on behalf of Ms. Mathias.

PAYMENTS TO PAST DIRECTORS (AUDITED)

There were no payments made to past directors during the year.

TOTAL 2023 ANNUAL BONUS AWARD

In addition to the above specific measures, the committee also considered direct client feedback,

investment performance and other feedback from the risk and audit committees. After taking this

into account, the committee concluded that an overall score for this element of the annual bonus of

34% out of 40% was appropriate, which corresponds to 46% of fixed pay.

Weight % Award achieved

Financial 60 26

Non-financial 40 34

Total 100 60

Total award

(£)

Delivered in

cash (£)

Deferred in

shares (£)

R P Stockton 470 235 235

J E Mathias 318 159 159

RESTRICTED STOCK PLAN

The performance underpin for the 2020 RSP was assessed based on performance to 31 December 2023.

The committee considered performance over the three years and determined that there was no reason

to reduce the level of vesting. In particular the committee took into account the following factors:

— Dividends payable – dividends increased each year in line with our progressive dividend policy

— ROCE – ROCE materially exceeded WACC in each of the three years of the performance period

— Operational performance – satisfactory over the period, with no events causing the committee to

believe a reduction in vesting is warranted.

— Risk and Compliance – satisfactory over the period, with no events causing the committee to

believe a reduction in vesting is warranted.

— Internal control environment – satisfactory over the period, with no events causing the committee

to believe a reduction in vesting is warranted.

As a result the following awards will vest:

Number of

shares granted

Proportion of

award vesting

Number of

shares vesting

Estimated value

of vested shares

Paul Stockton 21881 100% 21881 £353089

Jennifer Mathias 14679 100% 14679 £236872

1. Based on average share price over Q4 2023 of £16.13

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The 2024 PSP targets are detailed in the table below, all measures have straight line vesting between

threshold and maximum:

Measure Weighting

Threshold (25%

of maximum

vesting)

Maximum

(100% vesting)

Underlying EPS (2026) 30% 172p 226p

Relative TSR 2024-2026 30% Median Upper quartile

Cumulative synergies delivered by 31 Dec 2026 40% £50m £72m

1. Peer group: abrdn, AJ Bell, Ashmore, Aviva, Close Brothers, Hargreaves Lansdown, Integrafin, Jupiter, Legal & General,

Liontrust, M&G, Ninety One, Phoenix, Quilter, Schroders, St James’s Place

NONEXECUTIVE DIRECTOR FEES

Non-executive director fees were reviewed in the year for the first time since 1 January 2020. The

following increases were applied:

Fee effective

1 January 2024

Fee effective

1 January 2023

Non-executive director base fee £65000 £60000

Committee chair fee £20000 £15000

IMPLEMENTATION OF THE REMUNERATION POLICY IN 2024

FIXED PAY

The fixed pay levels effective 1 January 2024 are £618000 for Paul Stockton (3% increase) and

£436800 for Iain Hooley.

ANNUAL BONUS

The annual bonus has a maximum value opportunity of 135% of fixed pay with measures and

weightings as follows:

Weight

Financial

— Underlying profit before tax 30%

— Total net organic growth in FUMA 20%

Strategic measures aligned to key objectives 50%

— IW&I integration

— Saunderson House completion of integration

— CLM delivery

— Growth enablement

— Client Satisfaction

— People and culture

100%

The targets under the financial metrics are deemed to be commercially sensitive and will be

disclosed following the end of the performance period in next year’s DRR.

PERFORMANCE SHARE PLAN (PSP)

The 2024 PSP award will be due to be granted following the AGM in May 2024, subject to shareholder

approval of the new remuneration policy. The remuneration committee determined that it was

appropriate to grant the executive directors an award at the maximum level of 200% of fixed pay. The

remuneration committee will review the level of vesting upon completion of the performance period.

ANNUAL REPORT ON REMUNERATION CONTINUED

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ANNUAL REPORT ON REMUNERATION CONTINUED

DIRECTORS’ INTERESTS IN SHARES (AUDITED)

The table below sets out details of the directors’ shareholdings and outstanding share awards that are

subject to vesting conditions, as at 31 December 2023:

Beneficially owned shares Subject to relevant holding period

Executive Director Private shares SIP Total EIP RSP

Deferred

bonus shares

SIP (not yet

beneficially

owned)

SAYE Total

R P Stockton 153304 4330 157 63 4 30422 68342 20408 1191 1181 121544

J E Mathias 19758 194 19952 16976 47 029 13880 412 1181 79478

Total

173,062 4,524 17 7, 58 6 47, 39 8 115,371 34,288 1,603 2,362 201,022

1. SIP matching and free shares held for less than three years may be forfeited in certain circumstances and so are not considered

beneficially owned

Unvested shares are subjected to income tax at vesting at the prevailing rate of taxation.

SHAREHOLDING GUIDELINES

In order to align the interests of executive directors and shareholders, the chief executive and chief

financial officer are required to acquire and retain a holding in shares or rights to shares equivalent to

the value of 250% and 200% of fixed pay within five years of the date of appointment respectively.

Shares that count towards these guidelines include shares that are owned outright, vested and not

exercised EIP, unvested deferred bonus, RSP and SIP awards. Percentages are calculated using the 29

December 2023 share price of £1742.

SHARED OWNERSHIP VERSUS POLICY

Remuneration policy

0% 100% 200% 300% 400% 500% 800%

1,000%

900%600% 700%

Beneficially owned Conditional

89%

475%

R P Stockton (CEO)

J E Mathias (CFO)

355%

367%

STRATEGIC

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129RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

RESTRICTED STOCK PLAN

Details of the restricted share award held by the executive directors are set out in the table below:

At 1 January 2023 During 2023 At 31 December 2023

Executive directors/Grant date

Face value of

award at grant

Number of

securities

originally

granted

Number of

unvested

securities

Securities

granted

Vested but

unexercised

(subject to sales

restriction

period)

Unvested

securities

Vested but

unexercised

(subject to

two-year

holding period)

End of

performance

period

End of holding

period period)

R P Stockton

14/05/2023 418002 − − 21425 −

21,425 – 14/04/2026 14/04/2028

07/03/2022 402579 25036 − − − 25,036 – 07/03/2025 07/03/2027

14/05/2021 392764 21881 − − − 21,881 – 14/05/2024 14/05/2026

J E Mathias

14/05/2023 288065 − − 14765 −

14,765 – 14/04/2026 14/04/2028

07/03/2022 282767 17 58 5 − − − 17, 5 8 5 – 07/03/2025 07/03/2027

14/05/2021 263488 14679 − − − 14,679 – 14/05/2024 14/05/2026

1. Awards equivalent to 65% of fixed pay were granted. As regulations prohibit the payment of dividend on such awards, the number of shares awarded has been determined by applying a share price over five days preceding the grant date, discounted to reflect the

value of estimated future dividends foregone over the vesting period (2023: £17.18, 2022: £13.87, 2021: £15.87). For the 2023 award, the face value has been calculated using a share price of £19.51 which was the average price over five days preceding the grant

(2022: £16.08 and 2021: £17.95)

2. The award will vest on the third anniversary of the grant date, with associated values to be included in the single figure table, and a further two-year holding period will apply. The awards are subject to malus and clawback provisions

DEFERRED BONUS PLAN

The deferred bonus awards held by executive directors are set out in the table below:

At 1 January 2023 During 2023 At 31 December 2023

Executive directors/Grant date

Face value of

award at grant

Number of

securities

originally

granted

Number of

unvested

securities

Securities

granted

Number

of securities

vested

Unvested

securities

Vested

securities

Vesting dates

for three equal tranches

R P Stockton

14/04/2023 108184 − − 6030 −

6,030 – 14/04/2024, 14/04/2025, 14/04/2026

07/03/2022 306917 21042 21042 − 6664 14,378 6,664 07/03/2023, 07/03/2024, 07/03/2025

J E Mathias

14/04/2023 75988 − − 4235 −

4,235 – 14/04/2024, 14/04/2025, 14/04/2026

07/03/2022 205898 14116 14116 − 4471 9,645 4,471 07/03/2023, 07/03/2024, 07/03/2025

1. The maximum annual bonus opportunity is 135% of fixed pay of which 50% is deferred into Rathbones shares and 50% is paid in cash. As regulations prohibit the payment of dividend on such awards, the number of shares awarded has been determined by applying a

share price over five days preceding the grant date, discounted (based on a three-year historical yield) to reflect the value of estimated future dividends foregone over the vesting period. As the award vests over a three-year period in equal tranches of 1/3 per annum,

for the 2023 award, the face value has been calculated using three share prices (year 1: £18.74, year2: £17.96 , year 3: £17.18 ), and for the 2022 award, the face value has been calculated using three share prices (year 1: £15.35, year 2: £14.61, year 3: £13.87)

2. The award will vest over a three-year period in equal tranches of 1/3 per annum. The awards are subject to malus and clawback provisions

ANNUAL REPORT ON REMUNERATION CONTINUED

STRATEGIC

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130RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL REPORT ON REMUNERATION CONTINUED

EXECUTIVE INCENTIVE PLAN

At 1 January 2023 During 2023 At 31 December 2023

Executive directors/Grant date Type of security Grant date

Face value

of award

at grant

Number of

securities

originally

granted

Number of

unvested

securities

Vested but

unexercised

(subject to sales

restriction

period)

Unvested

securities

Vested but

unexercised

(subject to sales

restriction

period)

Normal

exercise date

(end of sales

restriction

period)

R P Stockton

Conditional shares 23/03/2018 226485 8864 1772 1772

– – 23/03/2023

Conditional shares 22/03/2019 376169 16376 6550 3275 3,275 13,101 22/03/2024

Conditional shares 23/03/2020 372435 24326 14595 4865 9,730 14,596 23/03/2025

Conditional shares 06/04/2021 486826 29029 23223 5806 17,417 11,612 06/04/2026

J E Mathias

Conditional shares 23/03/2020 202608 13233 793 8 2646

5,292 7,941 23/03/2025

Conditional shares 06/04/2021 326592 19474 15579 3895 11,684 7,7 9 0 06/04/2026

1. Exercise price is nil

2. EIP awards vest in five equal tranches (1, 2, 3, 4 and 5 years from grant). All shares must be held until the fifth anniversary of the grant (the normal exercise date). There are no further performance conditions on these shares

SHARE INCENTIVE PLAN

At 1 January

2023

During

2023

At 31 December

2023

Executive directors/Grant date

Total number

of SIP Shares

Partnership

acquired

Matching

acquired

Dividend

acquired

Free shares

received

Total number

of SIP shares

R P Stockton 4977 98 98 348 − 5,521

J E Mathias 377 98 98 33 − 606

Total 5354 196 196 381 − 6,127

1. SIP matching and free shares held for less than three years may be forfeited in certain circumstances and so are not considered to be beneficially owned

STRATEGIC

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131RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

SAVE AS YOU EARN OUTSTANDING OPTIONS

Number of shares

Executive directors Grant date

At 1 January

2023

Granted in

2023

Exercised in

2023

Lapsed in

2022

At 31 December

2023

Earliest

exercise date

Option price

Market price

on grant

Face value

of award

Value of award

R P Stockton 21/04/2020 1,658 – 1,658 – – 01/06/2023 1085 1380 22880 4891

28/04/2023

– 1,181 – – 1,181 01/06/2026 1524 1954 23077 5078

J E Mathias 21/04/2020

1,658 – 1,658 – – 01/06/2023 1085 1380 22880 4891

28/04/2023

– 1,181 – – 1,181 01/06/2026 1524 1954 23077 5078

Total

3,316 2,362 3,316 – 2,362

1. The face value of the award is based on the middle market share price on the grant date multiplied by the number of shares under option

2. The value of the award is based on the middle market share price on the grant date minus the option price

PERFORMANCE GRAPH

The chart below shows the company’s total shareholder return (TSR) against the FTSE All Share

Index for the 10 years to 31 December 2023. TSR is calculated assuming that dividends are

reinvested. TSR compares our dividends and share price performance measures with our selected

index, the FTSE All Share.

% change

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

100

2023

Rathbones – Total Shareholder Return FTSE All Share – Total Shareholder Return

ANNUAL REPORT ON REMUNERATION CONTINUED

CHIEF EXECUTIVE OFFICER SINGLE FIGURE

During the 10 years to 31 December 2023, Andy Pomfret was chief executive until 28 February 2014.

Philip Howell was chief executive until 9 May 2019 when he was succeeded by Paul Stockton.

Year Chief executive

Chief executive

single figure of

total remuneration

£’000

EIP award or

short-term bonus

as % of maximum

opportunity

Long-term

incentive vesting as

% of maximum

opportunity

2023 Paul Stockton 1,413 60 100

2022 Paul Stockton 759 30 −

2021 Paul Stockton 1155 85 −

2020 Paul Stockton 1358 57 −

2019 Paul Stockton 1125 47 −

2019 Philip Howell

467 52 −

2018 Philip Howell 1389 59 −

2017 Philip Howell 1104 64 −

2016 Philip Howell 1398 66 67

2015 Philip Howell 1608 78 100

2014 Philip Howell 999 89 n/a

2014 Andy Pomfret

342 n/a 96

1. Payment relates to holding the role for part of the year

2. RSP vested at 100%, this had an underpin only

STRATEGIC

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132RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL REPORT ON REMUNERATION CONTINUED

ANNUAL PERCENTAGE CHANGE IN THE REMUNERATION OF THE DIRECTORS AND EMPLOYEES

The table below shows the percentage year-on-year change in salary, benefits and bonus in 2023 for

the directors compared with the average Rathbones employee.

2023 2022 2021 2020

Salary Benefits Annual bonus Salary Benefits Annual bonus Salary Benefits Annual bonus Salary Benefits Annual bonus

Executive directors

R P Stockton 12.4% 5.4% 117.0 % 00% 51% - 6 71% 00% 12% -221% 00% 71% 27%

J E Mathias

4.0% 5.4% 109.0% 47% 51% -656% 00% 12% -211% 00% 55% 17 5%

Non-executive

directors

C C R Bannister

0.0% n/a n/a 00% n/a n/a n/a n/a n/a n/a n/a n/a

I A Cummings

7.4% n/a n/a 164% n/a n/a n/a n/a n/a n/a n/a n/a

S F Gentleman

4.5% n/a n/a 85% n/a n/a 00% n/a n/a 71% n/a n/a

T L Duhon

0.0% n/a n/a 00% n/a n/a 00% n/a n/a 71% n/a n/a

D P Mistry

8.3% n/a n/a 00% n/a n/a n/a n/a n/a n/a n/a n/a

H Baldock

0.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

R Leas

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Average pay based on all

Rathbones employees

4.7% 3.6% 2.4% 36% 98% -205% 19% 21% -64% 36% 123% 119%

1. The 2022 and 2023 figures include both ESPP cash and year 1,2 and 3 deferred share ESPP bonus awards. 2023 values include

the 2021-2023 RSU which vests in 2024 but relates to the 2023 performance year

2. Iain Cummings was appointed chair of the audit committee during 2022, comparative values are not for a full year.

Annualised total entitlements are the same

3. Sarah Gentleman was appointed senior independent director during 2022, comparative values are not for a full year.

Annualised total entitlements are the same

4. Dharmash Mistry was appointed as chair of the remuneration committee during 2023

5. The above values for the employee group do not include IW&I staff

6. Ruth Leas is excluded from the above table as she is not an employee of the Rathbones Group

STRATEGIC

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133RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ANNUAL REPORT ON REMUNERATION CONTINUED

CHIEF EXECUTIVE AND EMPLOYEE PAY RATIO

Year Method

25th

percentile

pay ratio

Median

(50th

percentile)

pay ratio

75th

percentile

pay ratio

1 January to 31 December 2023 B 391 191 101

1 January to 31 December 2022 B 211 111 41

1 January to 31 December 2021 B 431 151 61

1 January to 31 December 2020 B 431 231 111

1 January to 31 December 2019 B 421 231 131

The chief executive pay ratio provides a comparison of total remuneration paid to the chief executive

in the year ended 31 December 2023 with total remuneration paid to the three employees whose pay

is at the 25th, 50th and 75th percentile of the group’s UK workforce (P25, P50 and P75 respectively).

Where multiple employees are at these percentiles we have selected the most representative job role

from across the group.

The pay data for the chief executive is taken from the total single figure of remuneration on page 132

of this report for Paul Stockton for the year ended 31 December 2023. The three employees have been

identified from our 2023 gender pay gap data under ‘Option B’ of the three methodologies provided

under the regulations, as the equivalent figures to the single figure table for each of the group’s UK

employees (‘Option A’) are not available at the time of producing this report.

Total pay for P25, P50 and P75 has been based on actual earnings for the financial year. Variable

remuneration has been calculated using the group’s forecast financial performance. Total pay and

benefits for the three employees includes the following: base salary, employer pension contributions,

taxable benefits, bonuses, share-based payment awards and profit share. The total pay and benefits

for these individuals is as follows

— P25381 (£36660)

— P50191 (£75057)

— P75101 (£136631)

The reduction in the pay ratio between 2020 and 2021 is primarily driven by the introduction of a

remuneration policy for the CEO and senior management introduced in 2021. This has a lower

maximum opportunity, and these changes only applied to the senior management and not the wider

employees. The group believes the median pay ratio for the year to be consistent with the group’s pay,

reward and progression policies for its UK workforce.

The committee will review these ratios on an annual basis.

CHAIR AND NONEXECUTIVE DIRECTORS’ FEES

Fees paid to the non-executive directors were not increased in 2023 but will be increased for the

2024 financial year. Any future increases will depend upon a rigorous assessment of the burden of

responsibilities and market rates. Senior independent director and committee chair fees are in

addition to the base fee.

CHAIR AND NONEXECUTIVE DIRECTORS’ FEES (AUDITED)

2023

£’000

2022

£’000

Chair

C C R Bannister

195 195

Non-executive directors

I A Cummings

75 70

T L Duhon

75 75

S F Gentleman

85 81

D P Mistry

65 60

H Baldock

56 n/a

R Leas

n/a n/a

Total

551 481

1. Chair of the board

2. Acts as committee chair

3. Acts as senior independent director and ceased chairing remuneration committee on 31 August 2023.

4. Assumed the role of remuneration committee chair as of 1 September 2023.

5. Henrietta Baldock was appointed on 21 September 2023 as a non-executive directors by Investec Bank plc under the terms of

the Relationship Agreement. The total fee includes payment received for non-executive director position held on the board of

Rathbones Group Plc and Investec Wealth & Investment Limited

6. Ruth Leas was appointed on 21 September 2023 as a non-executive directors by Investec Bank plc under the terms of the

Relationship Agreement. Ruth Leas does not receive a non-executive fee as she is an employee of Investec Bank Plc (subsidiary

of Investec plc)

STRATEGIC

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INFORMATION

134RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NONEXECUTIVE DIRECTORS’ SHARE INTERESTS

The interest of the directors in the ordinary shares of the company are set out below:

2023 2022

Chair

C C R Bannister

15,300 15300

Non-executive directors

I A Cummings

2,594 1304

T L Duhon

500 −

S F Gentleman

1,128 100

D P Mistry

2,500 2500

H Baldock

0 n/a

R Leas

0 n/a

Total

22,022 19204

RELATIVE IMPORTANCE OF SPEND ON PAY

The chart below shows the relationship between total employee remuneration and profit after tax for

2023 and 2022. The reported profit after tax has been selected by the directors as a useful indicator

when assessing the relative importance of spend on pay.

RELATIVE IMPORTANCE OF SPEND ON PAY (£m)

Total staff costs

245.6

313.6

49.0

37. 5

48.6

71.4

28%

-23%

47%

Profit after Tax

245.6

313.6

49.0

37. 5

48.6

71.4

28%

-23%

47%

Dividends paid

245.6

313.6

49.0

37. 5

48.6

71.4

28%

-23%

47%

STATEMENT OF SHAREHOLDER VOTING

The table below shows the voting outcomes on the directors’ remuneration policy at the 2021 AGM in

May 2021 and directors’ remuneration report at the last AGM in May 2023.

Annual

report on

remuneration

(2023 AGM)

Remuneration

policy

(2021 AGM)

Votes cast in favour 87.9 9 % 8968%

Votes cast against

12.01% 1032%

Total votes cast

76.92% 7586%

Votes withheld

288,326 325955

ADVISERS TO THE COMMITTEE AND THEIR FEES

PwC were appointed by the committee, as advisers to the committee in August 2017 following a

competitive tender process. They are members of the Remuneration Consultants Group and advise

the committee on a range of matters including remuneration package assessments, scheme design

and reporting best practice. PwC also provide professional services in the ordinary course of

business, including advisory work to the group. The committee is of the opinion that the advice

received is objective and independent. PwC’s fees are charged on a time cost basis and fees for

services to the remuneration committee were £194000 in 2023. The appointment of advisers is

reviewed annually.

EVALUATING THE PERFORMANCE OF THE COMMITTEE

The annual internal evaluation of the committee’s effectiveness was undertaken as part of the

board’s internal evaluation process during the year. The committee and senior management

attendees were invited to respond to questions on the content, management, and quality and focus of

discussion during meetings. Responses indicated that the committee is performing well with no

particular concerns.

APPROVAL

The remuneration committee report has been approved by the board.

Signed on behalf of the board.

Dharmash Mistry

Chair of the Remuneration Committee

5 March 2024

ANNUAL REPORT ON REMUNERATION CONTINUED

STRATEGIC

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REPORT

FURTHER

INFORMATION

135RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

DIRECTORS’ REPORT

The directors present their annual report and audited financial statements for the year ended

31 December 2023.

The directors’ report includes the following sections of the annual report and accounts which form

part of the directors’ report:

DTR Rule Page

Strategic report DTR 415R 2

Corporate governance report including the nomination, audit, risk and

remuneration committee reports D T R 7 21 R 88

Statement of directors’ responsibilities DTR 415R 139

STATEMENT BY THE DIRECTORS UNDER SECTION 172 OF THE COMPANIES ACT 2006

(THE ‘ACT’) REGARDING PERFORMANCE OF THEIR STATUTORY DUTIES

The directors consider that they have acted in the way they consider, in good faith, would be most

likely to promote the success of the company for the benefit of its members as a whole and, in doing

so, having regard to the stakeholders and matters set out in section 1721)(a-f) of the Act. Details of

how they have done this are set out in the strategic report on pages 49 to 57.

ANNUAL GENERAL MEETING (AGM)

The 2024 AGM will be held on Thursday 9 May 2024 at 8 Finsbury Circus, London EC2M 7AZ.

Fulldetails of all resolutions and notes are set out in the separate notice of AGM.

GROUP RESULTS AND COMPANY DIVIDENDS

The Rathbones Group Plc group profit after tax for the year ended 31 December 2023 was

£37503923 (2022: £48984000).

The directors recommend the payment of a final dividend of 24p per share which, if approved by

shareholders at the 2024 AGM, will be paid on Tuesday 14 May 2024 to shareholders on the register

on Friday 19 April 2024.

2023 2022

Pence £m Pence £m

First interim dividend 29.0 1 7. 5 280 165

Second interim dividend

34.0 20.5 − −

Final dividend

24.0* 24.9* 560 334

Total

87.0 62.9 840 499

* Subject to shareholder approval at the 2024 AGM on 9 May 2024

See note 12 to the financial statements.

The company operates a generally progressive dividend policy subject to market conditions. The aim

is to increase the dividend in line with the growth of the business over each economic cycle. This

means that there may be periods where the dividend is maintained but not increased and periods

where profits are retained rather than distributed to maintain retained reserves and regulatory capital

at prudent levels through troughs and peaks in the cycle.

SUBSTANTIAL SHAREHOLDINGS

As at 31 December 2023, the company had received notifications in accordance with the Financial

Conduct Authority’s Disclosure and Transparency Rule 5 of the following interests:

Shareholder

Holding at

05 March 2024

% held at

05 March 2024

Investec Bank Plc 27056463 2987

Lindsell Train Ltd 6336500 70 0

Fidelity Management & Research 4595026 507

BlackRock 3349362 370

Heronbridge Investment Management 3028667 334

Vanguard Group 2901077 320

SHARE CAPITAL

The company’s share capital comprises of two classes of ordinary shares:

Classes of Ordinary Shares As at 31 December 2023

Ordinary shares of 5 pence each with voting rights:

On a show of hands each voting shareholder shall have one vote, and

on a poll each voting shareholder shall have one vote for each ordinary

share of which they are the holder. Ordinary shares rank pari passu in

all respects with each other and rank in full for all dividends and other

distributions thereafter declared, made, or paid in respect of the

ordinary shares.

90584129 ordinary shares of

5 pence each with voting rights in

issue (2022: 63394837).

Convertible non-voting ordinary shares of 5 pence each:

The holders of the convertible non-voting ordinary shares are not

entitled to receive notice of nor attend, speak or vote at any general

meeting of Rathbones unless the business of the meeting includes the

consideration of a resolution to vary the class rights attaching to the

convertible non-voting ordinary shares. Convertible non-voting

ordinary shares shall rank pari passu in all other respects with each

other and shall rank pari passu for all dividends and other distributions

thereafter declared, made, or paid. The convertible non-voting ordinary

shares are non-transferrable and are not admitted to trading or listing.

17481868 convertible non-voting

ordinary shares of 5 pence each in

issue (2022: nil).

STRATEGIC

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FINANCIAL

STATEMENTS

GOVERNANCE

REPORT

FURTHER

INFORMATION

136RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

The company does not hold any shares in treasury. Details of movements during the year are set out

in note 30 to the financial statements. Neither class carries the right to fixed income and all shares

are fully paid.

COMBINATION OF RATHBONES AND INVESTEC WEALTH & INVESTMENT UK

The all-share combination between the company and Investec Wealth & Investment UK (‘IW&I’)

completed on 21 September 2023. Under the terms of the Combination, Rathbones have issued to

Investec Bank Plc as Consideration:

— 27056463 ordinary voting shares representing 299% of the Rathbones enlarged ordinary

votingshare capital

— 17481868 convertible non-voting ordinary shares.

such that Investec Group has an economic interest of 4125% in Rathbones’ enlarged share capital.

Subject to certain customary and other exceptions, Investec Group will be subject to a lock-up for the

first two years following completion during which Investec Group will not be permitted to sell any

consideration shares. In each of years three and four following completion, Investec Group will be

entitled to sell one-third of the consideration shares which it owns. Any disposals of shares by

Investec Group once released from lock-up will be subject to customary orderly market provisions.

The lock-up arrangement will terminate on the fourth anniversary of completion.

A standstill restriction also applies to Investec Group under which it has been agreed, among other

matters, not to acquire shares in, or make an unsolicited takeover offer for Rathbones for the period

up to the fifth anniversary of completion.

NEW ISSUES OF SHARE CAPITAL

Under section 551 of the Companies Act 2006, the board currently has the authority to allot

21144460 shares (approximately one third of the issued share capital as at 31 March 2023). The

existing authorities given to the company at the last AGM to allot shares will expire at the conclusion

of the forthcoming 2024 AGM and details of the resolution renewing this authority is set out in the

notice of AGM.

Awards under the company’s employee share plans are satisfied from a combination of shares held in

the employee benefit trust and newly issued shares. During the year, the company issued 132829

shares to satisfy share awards and no shares were issued to the company’s employee benefit trust to

satisfy future awards.

PURCHASE OF OWN SHARES

At the 2023 AGM, shareholders approved resolution 17 which granted the board the authority to

buyback up to a maximum number of 6343000 of the company’s shares under certain stringent

conditions. During the year, the company did not utilise this authority, but the board considers it

prudent to renew it. Therefore the company intends to seek shareholder approval for the continued

authority to purchase its own shares at the forthcoming AGM in line with current investor sentiment

and details of the resolution renewing the authority are included in the notice of AGM.

EMPLOYEE SHARE TRUST

On 4 April 2017, Equiniti Trust (Jersey) Limited was appointed as trustee of the employee benefit

trust. The trust is independent and holds shares for the benefit of employees and former employees

of the group. The trustee has agreed to satisfy awards under all the company’s employee share plans.

During the year, the trustee satisfied awards totalling 1176445 ordinary shares.

In addition, under the rules of the Rathbones Share Incentive Plan, shares are held in trust for

participants by Equiniti Share Plan Trustees Limited (the ‘Trustee’). At the participants’ direction,

thetrustees can exercise the voting rights over ordinary shares in respect of participant share

entitlements. If no such instruction is received by the Trustee then no vote is registered. No person

has any special rights of control over the company’s share capital and all issued shares are fully paid.

APPOINTMENT AND REMOVAL OF DIRECTORS

The appointment and replacement of directors is governed by the company’s Articles of Association,

the UK Corporate Governance Code, the Companies Act 2006 and related legislation and the

Relationship Agreement with Investec Group. Under the terms of the Combination, two Investec

Group representatives joined the board of the company as non-executive directors on completion,

reflecting Investec Group’s position as a significant, strategic shareholder. Investec Group will be

entitled to nominate two non-executive directors for as long as it holds at least 20% of the issued

share capital of the company; and one non-executive director for as long as it holds at least 10% but

less than 20% of the issued share capital of the company.

DIRECTORS

All those who served as directors at any time during the year are listed on pages 92 to 93. All directors

will be submitted for re-election at the 2024 AGM. The directors’ interests in the share capital of the

company as at 31 December 2023 are set out on pages 129 and 135 of the remuneration committee

report.

INSURANCE AND INDEMNIFICATION OF DIRECTORS

The company has put in place insurance to cover its directors and officers against the costs of

defending themselves in civil legal action taken against them in that capacity and any damages

awarded. The company has granted indemnities, which are uncapped, to its directors and the

company secretary by way of a deed. Qualifying third-party indemnity provisions, as defined by

section 234 of the Companies Act 2006, were therefore in place throughout 2023 and remain in force

at the date of this report.

DIRECTORS’ REPORT CONTINUED

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DIRECTORS’ REPORT CONTINUED

OUR PEOPLE AND DIVERSITY

Details of the company’s employment practices, including engaging with our people and diversity,

employment of disabled persons and employee involvement practices, can be found in the people

report on pages 61 and 62.

RESPONSIBLE BUSINESS

Information about greenhouse gas emissions and our approach to operating as a responsible business

are set out in the responsible business review on page 64.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The risk management objectives and policies of the group are set out in note 33 to the

financialstatements.

AUDITOR

The audit committee makes a recommendation to the board regarding the appointment, re-

appointment and removal of the external auditor and oversees its relationship with the group,

including the implementation of the policy on audit and non-audit services. Note 7 to the financial

statements sets out details of the auditor’s remuneration. Deloitte LLP was re-appointed as the

external auditor at the 2023 AGM. Having reviewed the independence and effectiveness of Deloitte

the audit committee has recommended to the board that they are re-appointed and resolutions

proposing their re-appointment and authorising the audit committee to set their remuneration

willbe proposed at the 2024 AGM.

The directors in office at the date of signing this report confirm that, so far as they are aware, there

isno relevant audit information of which the auditor is unaware and that each director has taken

allreasonable steps that he or she ought to have taken to make him or herself aware of any relevant

audit information and to establish that the auditor is aware of that information.

GOING CONCERN

Details of the group’s business activities, results, cash flow and resources, together with the risks it

faces and other factors likely to affect its future development, performance and position are set out

inthe chair’s statement, chief executive’s review, financial performance and segmental review. In

addition, note 15 to the financial statements provides further detail.

The group companies are regulated by the Prudential Regulation Authority (PRA) and/or the

Financial Conduct Authority (FCA) and perform annual capital adequacy and liquidity assessments,

which include the modelling of certain extreme stress scenarios. The company publishes Pillar 3

disclosures annually on its website which provide detail about its regulatory capital resources and

requirements. In July 2015, Rathbone Investment Management issued £20 million of 10-year

subordinated loan notes to finance future growth which were repaid in August 2021. In October

2021, Rathbones Group Plc issued £40 million of 10-year subordinated loan notes to finance future

growth. The group has no other external borrowings.

The directors believe that the company is well placed to manage its business risks successfully

despite the continuing uncertain economic and geopolitical outlook. As the directors have a

reasonable expectation that the company has adequate resources to continue in operational

existence for the foreseeable future they continue to adopt the going concern basis of accounting

inpreparing the annual financial statements.

CHARITABLE DONATIONS

As at 31 December 2023, the group had made total charitable donations of £589172 representing

138% of group pre-tax profits (2022: £795100 representing 124% of group pre-tax profits). This

includes the matching of employee donations made through the tax efficient Give As You Earn

(‘GAYE’) payroll giving scheme. In 2023, Rathbones employees made payments totalling £262567

(2022: £221400) through this scheme, which is administered by the Charities Aid Foundation.

Thecompany matched employee donations of up to £200 per month made through GAYE and, in

2023, donated £215974 (2022: £204500) to causes chosen by employees through this method.

POLITICAL DONATIONS

No political donations were made during the year (2023: nil).

POSTBALANCE SHEET EVENTS

Details of post-balance sheet events are set out in note 39 to the financial statements.

OVERSEAS SUBSIDIARIES

Details of overseas subsidiaries are set out in note 45 to the financial statements.

Approved and authorised for issue by the board of directors.

Ali Johnson

Group Company Secretary

5 March 2024

Registered office: 8 Finsbury Circus, London EC2M 7AZ

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STATEMENT OF DIRECTORS’ RESPONSIBILITIES

IN RESPECT OF THE REPORT AND ACCOUNTS

The directors are responsible for preparing the report and accounts 2023, and the group and parent

company financial statements in accordance with applicable law and regulations.

Company law the directors to prepare group and parent company financial statements for each

financial year. Under that law they are required to prepare the group financial statements in

accordance with UK-adopted International Accounting Standards (International Financial Reporting

Standards (IFRS)) and applicable law and have elected to prepare the parent company financial

statements on the same basis.

Under company law, the directors must not approve the financial statements unless they are satisfied

that they give a true and fair view of the state of affairs of the group and parent company and of their

profit or loss for that period. In preparing each of the group and parent company financial statements,

the directors are required to:

— select suitable accounting policies and then apply them consistently

— make judgements and estimates that are reasonable, relevant and reliable

— state whether they have been prepared in accordance with UK-adopted International Accounting

Standards (IFRS)

— assess the group and parent company’s ability to continue as a going concern, disclosing, as

applicable, matters related to going concern

— use the going concern basis of accounting unless they either intend to liquidate the group or the

parent company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show

andexplain the parent company’s transactions and disclose with reasonable accuracy at any time

thefinancial position of the parent company and enable them to ensure that its financial statements

comply with the Companies Act 2006.

They are responsible for such internal controls as they determine are necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud

orerror, and have general responsibility for taking such steps as are reasonably open to them to

safeguard the assets of the group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a strategic

report, directors’ report, directors’ remuneration report and corporate governance statement that

comply with that law and those regulations.

The directors are responsible for the maintenance and integrity of the corporate and financial

information included on the company’s website. Legislation in the UK governing the preparation

anddissemination of financial statements may differ from legislation in other jurisdictions.

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE REPORT

AND ACCOUNTS

We confirm that to the best of our knowledge:

— 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 company

and the undertakings included in the consolidation taken as a whole

— the strategic report and directors’ report include a fair review of the development and performance

of the business and the position of the issuer and the undertakings included in the consolidation

taken as a whole, together with a description of the principal risks and uncertainties that they face.

We consider the report and accounts, taken as a whole, is fair, balanced and understandable and

provides the information necessary for shareholders to assess the group’s position and performance,

business model and strategy.

By order of the board

Paul Stockton

Group Chief Executive Officer

5 March 2024

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STATEMENTS

141

Independent auditor’s report to the

members of Rathbones Group Plc

151

Consolidated financial statements

155

Notes to the consolidated

financialstatements

213

Company financial statements

216

Notes to the company

financialstatements

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140RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

INDEPENDENT AUDITOR’S REPORT TO THE

MEMBERS OF RATHBONES GROUP PLC

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

1. OPINION

In our opinion:

— the financial statements of Rathbones Group Plc (the ‘parent company’) and its subsidiaries (the

‘group’) give a true and fair view of the state of the group’s and of the parent company’s affairs as at

31 December 2023 and of the group’s profit for the year then ended;

— the group financial statements have been properly prepared in accordance with United Kingdom

adopted international accounting standards;

— the parent company financial statements have been properly prepared in accordance with United

Kingdom adopted international accounting standards and as applied in accordance with the

provisions of the Companies Act 2006; and

— the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements which comprise:

— the consolidated statement of comprehensive income;

— the consolidated and parent company statements of changes in equity;

— the consolidated and parent company balance sheets;

— the consolidated statement of cash flows; and

— the related notes 1 to 61.

The financial reporting framework that has been applied in their preparation is applicable law and

United Kingdom adopted international accounting standards and as regards the parent company

financial statements, as applied in accordance with the provisions of the Companies Act 2006.

2. BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the auditor’s

responsibilities for the audit of the financial statements section of our report.

We are independent of the group and the parent company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the

Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest

entities, and we have fulfilled our other ethical responsibilities in accordance with these

requirements. The non-audit services provided to the group and parent company for the year are

disclosed in note 7 to the financial statements. We confirm that we have not provided any non-audit

services prohibited by the FRC’s Ethical Standard to the group or the parent company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

3. SUMMARY OF OUR AUDIT APPROACH

KEY AUDIT MATTERS

The key audit matters that we identified in the current year were:

— Acquisition accounting for Investec Wealth & Investment Limited and subsidiary entities;

— Impairment of client relationship intangible assets and goodwill;

— Defined benefit pension scheme assumptions; and

— Investment management fee revenues relating to bespoke fees.

Within this report, key audit matters are identified as follows:

NEWLY IDENTIFIED

INCREASED LEVEL OF RISK

SIMILAR LEVEL OF RISK

DECREASED LEVEL OF RISK

MATERIALITY

The materiality that we used for the group financial statements was £50 million which was

determined on the basis of 5% of adjusted profit before tax.

SCOPING

The scope of our audit covered substantially the entire group, with both the investment

management entities and unit trust business being subject to a full scope audit.

SIGNIFICANT CHANGES IN OUR APPROACH

On 21 September 2023, the group acquired 100% of the share capital of Investec Wealth &

Investment Limited and its subsidiary entities (“IW&I”) through an all-share transfer. The total

consideration was £7519 million. This is a material transaction for the group and involves the

determination of a number of critical accounting estimates, and thus we have identified the

acquisition accounting for this transaction as an additional key audit matter for our 2023 audit.

Our audit included the full scope audit of the main trading entity acquired as part of the

transaction, Investec Wealth & Investment Limited, for the period 21 September 2023 to

31December 2023. The audit of this component was conducted by the statutory auditor

Ernst&Young LLP under referral instructions from Deloitte LLP as the group auditor.

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4. CONCLUSIONS RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the directors’ use of the going concern

basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to

adopt the going concern basis of accounting included:

— Evaluating management’s assumptions applied in the going concern assessment in light of the

current economic environment and testing the mechanical accuracy of the underlying forecast;

— Assessing management’s sensitivity analysis on the key assumptions applied to understand those

that could give rise to a material uncertainty on the use of the going concern basis;

— Assessing management’s stress testing for the amount by which the markets would need to fall to

cause a material uncertainty in the use of the going concern basis and comparing this to historical

falls in the markets to assess the likelihood of such an event occurring;

— Assessing the regulatory capital and liquidity position of the group and evaluating management’s

reverse stress test;

— Checking consistency with the forecast assumptions applied in the going concern assessment

across other forecasts within the group; and

— Assessing the disclosures within the financial statements to ensure they are appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to

events or conditions that, individually or collectively, may cast significant doubt on the group’s and

parent company’s ability to continue as a going concern for a period of at least twelve months from

when the financial statements are authorised for issue.

In relation to the reporting on how the group has applied the UK Corporate Governance Code,

wehave nothing material to add or draw attention to in relation to the directors’ statement in the

financial statements about whether the directors considered it appropriate to adopt the going

concernbasis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are

described in the relevant sections of this report.

5. KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in

our audit of the financial statements of the current period and include the most significant assessed

risks of material misstatement (whether or not due to fraud) that we identified. These matters

included those which had the greatest effect on: the overall audit strategy; the allocation of resources

in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole,

andin forming our opinion thereon, and we do not provide a separate opinion on these matters.

5.1 ACQUISITION ACCOUNTING FOR INVESTEC WEALTH & INVESTMENT LIMITED AND

SUBSIDIARY ENTITIES

KEY AUDIT MATTER DESCRIPTION

Rathbones Group acquired 100% of the share capital of Investec Wealth & Investment Limited and

its subsidiary entities (“IW&I”) through an all-share transfer on 21 September 2023. The total

consideration was £7519m of which £3503m was attributed to recognition of client relationship

intangible assets, which are being amortised over a weighted average of 14 years, and £3401m to

goodwill.

As detailed in the summary of principal accounting policies in note 1 and note 2, and as disclosed

in note 8, acquisition accounting requires management to make a number of judgments to

determine the fair value of acquired identifiable assets. Management have engaged external

specialists to assist with these judgements. These judgements have also been considered by the

Audit Committee as set out on page 104. We have identified the valuation of the IW&I client

relationship intangible assets as a fraud risk, given the inherent judgment, complexity and level of

estimation involved.

The significant assumptions that underpin the client relationship intangible assets valuation

in management’s model include: the forecasted cash flows, useful economic life and the

discount rate.

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5.2. IMPAIRMENT OF CLIENT RELATIONSHIP INTANGIBLE ASSETS AND GOODWILL

KEY AUDIT MATTER DESCRIPTION

The group holds client relationship intangible assets of £5175 million (2022: £1885 million)

comprising both client relationships acquired through business combinations and through

acquisition of individual investment managers and their client portfolios and goodwill of £5078

million (2022: £1677 million).

As detailed in the summary of principal accounting policies in notes 1 and 2, client relationship

intangible assets are reviewed for indicators of impairment at each balance sheet date and, if an

indicator of impairment exists, an impairment test is performed. Goodwill is tested for impairment

at least annually, whether or not indicators of impairment exist. These judgements have also been

considered by the Audit Committee as set out on page 104.

For client relationship intangible assets, in determining the appropriate impairment triggers for

each client portfolio, there is a degree of management judgement. This assessment is based on

movements in the value of funds under management and the loss of client relationships in

advance of their amortisation period.

For goodwill, the impairment assessment is performed by comparing the carrying amount of each

cash generating unit (“CGU”) to its recoverable amount from its value-in-use (“VIU”), calculated

using a discounted cash flow method. In determining the VIU for the CGUs, management is

required to make assumptions in relation to an appropriate income growth rate, expenditure

growth rate and the discount rate. The discount rate, annual revenue growth rate and terminal

growth rate used are disclosed in note 22.

We have identified this as a key audit matter given the inherent judgement and level of estimation

in the assumptions that support the annual impairment reviews. In the prior period, we identified

this as a fraud risk, however as a result of increased headroom on the most material impairment

reviews, we did not deem this to be a fraud risk in the current period.

HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER

In order to respond to the key audit matter, we performed the following procedures:

— obtained an understanding of relevant controls over the acquisition accounting, in particular

the identification and measurement of the client relationship intangible assets and goodwill and

controls over the acquisition accounting related judgments;

— assessed the competence, capability and objectivity of management’s experts;

— assessed management’s accounting analysis of the acquisition and the accounting treatment in

line with the requirements of IFRS 3;

— engaged our in-house valuation specialists to: assist in the evaluation of the methodology and

the key assumptions used in the valuation of the client relationship intangible assets acquired;

independently determine an appropriate discount rate for the calculation and assessed the

methodology used to establish useful economic lives of assets;

— tested the key data inputs used to determine the useful economic life for completeness and

accuracy;

— challenged the entity’s forecast cash flows by comparing with approved business plans,

historical performance and objective macro-economic indications to assess the achievability of

the forecasts;

— tested the completeness and accuracy of the data inputs into the underlying models used in

determining the client relationship intangible assets valuation and the goodwill value;

— reviewed the share purchase agreement to corroborate the overall deal structure and

transaction price, and agreed the value of the total consideration to supporting documentation;

— with the assistance of our tax specialists, assessed the tax implications arising from this

acquisition; and

— checked the disclosures included in the financial statements to determine whether all

information has been included for a business combination under IFRS 3.

KEY OBSERVATIONS

We conclude that the acquisition accounting in relation to the IW&I transaction and the related

disclosures as at 31 December 2023, is appropriate.

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HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER

We obtained an understanding of relevant controls in relation to the impairment review process

for client relationship intangible assets for both acquired portfolios and individual relationships

and for goodwill.

For client relationship intangible assets, we specifically tested the assumptions used by

management as part of the impairment review exercise to assess whether they meet the

requirements of IAS 36 “Impairment of Assets”. We assessed the key assumptions around the

impairment triggers identified for each client portfolio, which we have assessed for

reasonableness, and we evaluated the accuracy of the inputs used by management.

Where management’s review indicated that an impairment trigger had occurred, we assessed the

relevant assumptions and judgements made by management in determining whether an

impairment needed to be recognised through the calculation of the assets’ VIU. To challenge

management’s VIU model we performed the following procedures:

— tested the key data inputs used to determine the useful economic life for completeness and

accuracy;

— recalculated the underlying calculation to ensure mathematical accuracy;

— stressed management’s assumptions to determine the point at which an impairment would

need to be recognised;

— with the involvement of our valuation specialists we independently determined an appropriate

discount rate for the calculation; and

— with the involvement our in-house economic specialists we have reviewed the growth rate

assumptions used for funds under management to challenge whether they were in line with

consensus.

For goodwill, in order to challenge the appropriateness of the income and expenditure growth

assumptions used in the VIU calculation, we have challenged the assumptions used by

management against historical actual performance and checked for consistency with forecasts

used elsewhere in the business. We challenged the determination of the discount rate applied by

benchmarking to appropriate market rates of interest. We also independently re-performed

management’s VIU calculation.

We have checked the disclosures included within the financial statements to determine whether

all required information has been included for the impairment of client relationship intangible

assets and goodwill.

KEY OBSERVATIONS

We concluded that management’s approach and conclusion was appropriate and that the carrying

value of client relationship intangible assets and goodwill as at 31 December 2023 is appropriate.

5.3 DEFINED BENEFIT PENSION SCHEME ASSUMPTIONS

KEY AUDIT MATTER DESCRIPTION

The group has recognised a defined benefit pension scheme net asset of £70 million (2022: net

asset of £94 million). The net asset comprises scheme assets of £1081 million (2022: £1041

million) and a defined benefit obligation of £1011 million (2022: £947 million).

The calculation of the defined benefit obligation is sensitive to changes in underlying assumptions

and is considered to be a key source of estimation uncertainty for the group as detailed in note 2,

disclosed in note 29 to the financial statements, and as considered by the Audit Committee on

page 104. We have therefore identified this as a key audit matter.

The key assumptions are in respect of the discount rate, inflation rate and mortality rate where

small changes to these assumptions could result in a material change to the valuation of the

defined benefit obligation.

HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER

In order to evaluate the appropriateness of the assumptions used by management, we obtained an

understanding of relevant controls over the determination of assumptions and the calculation of

the obligation to be recognised in the financial statements.

With the involvement of our in-house actuarial specialists, we made direct enquiries of the group’s

actuary to review and challenge each of the key assumptions used in the IAS 19 (“Employee

Benefits”) pension valuation. In particular, we assessed each assumption used by management

against independently determined benchmarks derived using market data.

We have checked the disclosures included within the financial statements to determine whether

all required information has been included for a defined benefit pension scheme..

KEY OBSERVATIONS

We concluded that each of the key assumptions used by management to estimate the defined

benefit obligation are consistent with the requirements of IAS 19 and that the valuation of the

defined benefit pension scheme net asset has been appropriately determined as at

31 December 2023.

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5.4. INVESTMENT MANAGEMENT FEE REVENUE RELATING TO BESPOKE FEES

KEY AUDIT MATTER DESCRIPTION

As detailed in the summary of principal accounting policies in notes 1 and 3, revenue comprises

net investment management fee income of £4148 million (2022: £3370 million), net commission

income of £536 million (2022: £489 million), net interest income of £517 million (2022: £183

million) and fees from advisory services and other income of £510 million (2022: £571 million).

Investment management (“IM”) fees from the IM segment account for approximately 80% of total

revenue and are based on a percentage of an individual client’s funds under management (“FUM”).

Due to its many long standing client relationships and history of acquisitions, the number of fee

schedules managed by the group is voluminous. This means that a number of clients are on

bespoke rates rather than the current standard rates or legacy rates that were standard previously

or at the time of acquisition. We identified a risk of potential fraud in respect to bespoke rates. Due

to the time and resources utilised in the audit, we have determined this to be a key audit matter.

HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER

We tested controls over the calculation of IM fees. This included controls relating to the set-up of

client fee rates, rate card amendments, the valuation of FUM and the system generated investment

management fees, including associated IT controls.

We used data analytics to recalculate the system generated amount for the total fee population.

We agreed a sample of bespoke client fee rates through to client contracts and the value of FUM to

third party sources. Where manual fee rate amendments were made to system generated fees, we

inspected evidence of authority and rationale.

We have checked the disclosures included within the financial statements to determine whether

all required information has been included for revenue.

KEY OBSERVATIONS

We concluded that the investment management fee revenue is appropriately recognised for the

year ended 31 December 2023.

6. OUR APPLICATION OF MATERIALITY

6.1. MATERIALITY

We define materiality as the magnitude of misstatement in the financial statements that makes it

probable that the economic decisions of a reasonably knowledgeable person would be changed or

influenced. We use materiality both in planning the scope of our audit work and in evaluating the

results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a

whole as follows:

GROUP FINANCIAL STATEMENTS

PARENT COMPANY FINANCIAL

STATEMENTS

MATERIALITY

£50 million (2022: £385 million) £40 million (2022: £308 million)

BASIS FOR

DETERMINING

MATERIALITY

5% of adjusted profit before tax

(2022: 5% of adjusted profit

before tax)

Profit before tax has been adjusted

to include the non-recurring

acquisition and integration related

costs incurred in the year. We have

rounded down the materiality

benchmark to £50 million for

simplicity.

Parent company materiality has

been set at 1% of net assets, which

is capped at 80% of group

materiality (2022: 1% of net assets,

which is capped at 80% of group

materiality).

RATIONALE FOR

THE BENCHMARK

APPLIED

Adjusted profit before tax has been

used as the basis for determining

materiality as this is the key metric

used by members of the parent

company and other relevant

stakeholders in assessing financial

performance. In determining

adjusted profit before tax, we have

taken the statutory value and

included the non-recurring

acquisition and integration related

costs incurred in the year as

outlined in note 9, on the basis that

they are non-recurring and that this

provides a consistent basis for

determining materiality year

on year.

The parent company primarily

holds the investments in group

entities and, therefore net assets is

considered to be the key focus for

users of the financial statements.

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145RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

ADJUSTED PBT

£101.9M

Group materiality:

£5.0m

Component

materiality range:

£2.5m – £4.0m

Audit Committee

reporting threshold:

£0.25m

Adjusted PBT

Group materiality

6.2. PERFORMANCE MATERIALITY

We set performance materiality at a level lower than materiality to reduce the probability that, in

aggregate, uncorrected and undetected misstatements exceed the materiality for the financial

statements as a whole.

GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL

STATEMENTS

PERFORMANCE

MATERIALITY

70% (2022: 70%) of group

materiality

70% (2022: 70%) of parent

company materiality

BASIS AND

RATIONALE FOR

DETERMINING

PERFORMANCE

MATERIALITY

In determining performance

materiality, we considered the

following factors:

— Our risk assessment, including

our assessment of the group’s

overall control environment and

that we consider it appropriate to

rely on controls over a number of

business processes;

— The performance of the group

during 2023; and

— Our past experience of the audit,

which has indicated a low

number of corrected and

uncorrected misstatements

identified in prior periods.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RATHBONES GROUP PLC CONTINUED

6.3. ERROR REPORTING THRESHOLD

We agreed with the Audit Committee that we would report to the Committee all audit differences in

excess of £250000 (2022: £192500), as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure

matters that we identified when assessing the overall presentation of the financial statements.

7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT

7.1. IDENTIFICATION AND SCOPING OF COMPONENTS

Our group audit was scoped by obtaining an understanding of the group and its environment,

including group-wide controls, and assessing the risks of material misstatement at the group

level.Given the IW&I combination during the year, we reassessed the scope of our audit against

previous years.

The group consists of the two main trading subsidiaries Rathbones Investment Management Limited

and the newly acquired Investec Wealth & Investment Limited along with the following entities that

we have identified to be significant for the group audit: Rathbones Group Plc and Rathbones Asset

Management Limited. These entities were subject to a full scope audit and audited to an individual

materiality level determined on their individual financial statements which ranged from £25 million

to £40 million.

Our full scope audits of the entities we deemed to be significant for the group audit covered 91% of

the group’s revenue; 93% of the group’s profit before tax, and 96% of the group’s net assets.

We performed an audit of the revenue balances for Rathbones Investment Management International

Limited and Saunderson House Limited as well as the cash balances within Investec Wealth &

Investment (Channel Islands) Limited and Murray Asset Management Limited. We performed

analytical procedures on all other entities included in the group consolidation.

REVENUE

Full audit scope: 91%

Speciﬁed

audit procedures: 6%

Review at

group level: 3%

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PROFIT BEFORE TAX

Full audit scope: 93%

Speciﬁed

audit procedures: 1%

Review at group

level: 6%

NET ASSETS

Full audit scope: 96%

Speciﬁed

audit procedures: 1%

Review at group

level: 3%

7.2. OUR CONSIDERATION OF THE CONTROL ENVIRONMENT

Based on our understanding of the group’s control environment, we have assessed the relevant

business and IT controls for investment management fee income in the IM segment.

The key IT systems relevant to the audit were the financial accounting system, the back-office

databases and core IM business engines and the front office applications. The latter two are pivotal

systems for the provision of the investment management service and directly feed into the

investment management fee and commission income recognised in the IM segment. Therefore, they

are particularly relevant for Rathbones Investment Management Limited, Investec Wealth &

Investment Limited and Rathbones Investment Management International Limited.

With involvement of our IT specialists we tested the controls over the above systems, as well as

supplementary systems and processes within the group. We also tested business controls over

investment management fee income recognised in the IM segment. We have taken a controls reliance

approach to the back-office database and front-office application systems and therefore to investment

management income.

We have tested the controls over the financial accounting system but have not taken reliance due

tothe significant degree of manual intervention.

7.3. OUR CONSIDERATION OF CLIMATERELATED RISKS

In planning our audit, we have considered the potential impact of climate change on the Group’s

business and its financial statements.

The group continues to develop its assessment of the potential impacts and opportunities of ESG

andclimate change as explained in the strategic report on pages 66 to 74.

As a part of our audit, we have obtained management’s climate-related risk assessment and held

discussions with management to understand the process of identifying climate-related risks, the

determination of mitigating actions and the impact on the Group’s financial statements. We have

engaged our climate specialists to perform a review of the TCFD disclosures.

We have assessed disclosures within note 33 included in the financial statements to consider

whether they are materially consistent with the financial statements and our knowledge obtained

inthe audit.

7.4. WORKING WITH OTHER AUDITORS

IW&I was assessed as a material component of the group for which we scoped a full scope audit. Ernst

& Young LLP are the component auditor for IW&I. All other subsidiaries were audited by the group

audit team.

Referral instructions were provided to the component audit team detailing the procedures to be

performed to support the group opinion. The group audit team have utilised virtual meetings and

in-person visits throughout the audit, to monitor and challenge the component audit team,

includingthe attendance of senior group audit team members at key component meetings.

Furthermore, the group audit team have reviewed the audit file of the component team, focussing

onthe following areas:

— Independence and engagement acceptance;

— Audit planning and risk assessment procedures;

— Testing of key controls on which reliance was placed for financial reporting;

— Testing of procedures for compliance with legal and regulatory matters;

— Assessment of key audit matters identified and the work performed on areas of significant risks of

material misstatements; and

— Identified misstatements, controls deficiencies and other significant matters arising from the audit

that could impact the audit opinion.

In addition to the review of the component audit file and discussions with the component auditor,

thegroup audit team assessed all the responses received from the component auditor to the

referralinstructions issued by the group auditor ensuring that the planned procedures had been

performed appropriately.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RATHBONES GROUP PLC CONTINUED

8. OTHER INFORMATION

The other information comprises the information included in the annual report, other than the

financial statements and our auditor’s report thereon. The directors are responsible for the other

information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to

theextent otherwise explicitly stated in our report, we do not express any form of assurance

conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the financial statements, or our knowledge obtained in

the course of the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to

determine whether this gives rise to a material misstatement in the financial statements themselves.

If, based on the work we have performed, we conclude that there is a material misstatement of this

other information, we are required to report that fact.

We have nothing to report in this regard.

9. RESPONSIBILITIES OF DIRECTORS

As explained more fully in the directors’ responsibilities statement, the directors are responsible for

the preparation of the financial statements and for being satisfied that they give a true and fair view,

and for such internal control as the directors determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

parent company’s ability to continue as a going concern, disclosing as applicable, matters related to

going concern and using the going concern basis of accounting unless the directors either intend to

liquidate the group or the parent company or to cease operations, or have no realistic alternative but

to do so.

10. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report

that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee

that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users

taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on

theFRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditor’s report.

11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING

IRREGULARITIES, INCLUDING FRAUD

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in

respect of irregularities, including fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below.

11.1 IDENTIFYING AND ASSESSING POTENTIAL RISKS RELATED TO IRREGULARITIES

In identifying and assessing risks of material misstatement in respect of irregularities, including

fraud and non-compliance with laws and regulations, we considered the following:

— the nature of the industry and sector, control environment and business performance including

the design of the group’s remuneration policies, key drivers for directors’ remuneration, bonus

levels and performance targets;

— the group’s own assessment of the risks that irregularities may occur either as a result of fraud or

error that was approved by the board on 20 February 2024;

— results of our enquiries of management, internal audit, the directors and the Audit Committee

about their own identification and assessment of the risks of irregularities, including those that are

specific to the group’s sector;

— any matters we identified having obtained and reviewed the group’s documentation of their

policies and procedures relating to:

— identifying, evaluating and complying with laws and regulations and whether they were aware

of any instances of non-compliance;

— detecting and responding to the risks of fraud and whether they have knowledge of any actual,

suspected or alleged fraud;

— the internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations; and

— the matters discussed among the audit engagement team including significant component audit

teams and relevant internal specialists, including tax, valuations, actuary, IT, climate and industry

specialists regarding how and where fraud might occur in the financial statements and any

potential indicators of fraud.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RATHBONES GROUP PLC CONTINUED

As a result of these procedures, we considered the opportunities and incentives that may exist

withinthe organisation for fraud and identified the greatest potential for fraud in the following

areas:the acquisition accounting for Investec Wealth & Investment Limited and its subsidiaries

andthe investment management fee revenue relating to bespoke fees. In common with all audits

under ISAs (UK), we are also required to perform specific procedures to respond to the risk of

management override.

We also obtained an understanding of the legal and regulatory frameworks that the group operates in,

focusing on provisions of those laws and regulations that had a direct effect on the determination of

material amounts and disclosures in the financial statements. The key laws and regulations we

considered in this context included the Prudential Regulation Authority and the Financial Conduct

Authority’s regulations; UK Companies Act; the Listing Rules; pensions legislation and the UK

taxlegislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on

the financial statements but compliance with which may be fundamental to the group’s ability to

operate or to avoid a material penalty. These included the group’s regulatory solvency requirements.

11.2. AUDIT RESPONSE TO RISKS IDENTIFIED

As a result of performing the above, we identified the acquisition accounting for IW&I; and the

investment management fee revenues relating to client bespoke fees as key audit matters related

tothe potential risk of fraud. The key audit matters section of our report explains the matters in

moredetail and also describes the specific procedures we performed in response to those key

auditmatters.

In addition to the above, our procedures to respond to risks identified included the following:

— reviewing the financial statement disclosures and testing to supporting documentation to assess

compliance with provisions of relevant laws and regulations described as having a direct effect on

the financial statements;

— enquiring of management, the Audit Committee and both in-house and external legal counsel

concerning actual and potential litigation and claims;

— performing analytical procedures to identify any unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud;

— reading minutes of meetings of those charged with governance, reviewing internal audit reports

and reviewing correspondence with HMRC, the Prudential Regulation Authority and the Financial

Conduct Authority; and

— in addressing the risk of fraud through management override of controls, testing the

appropriateness of journal entries and other adjustments; assessing whether the judgements made

in making accounting estimates are indicative of a potential bias; and evaluating the business

rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all

engagement team members including internal specialists and significant component audit teams

and remained alert to any indications of fraud or non-compliance with laws and regulations

throughout the audit.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

12. OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion, based on the work undertaken in the course of the audit:

— the information given in the strategic report and the directors’ report for the financial year for

which the financial statements are prepared is consistent with the financial statements; and

— the strategic report and the directors’ report have been prepared in accordance with applicable

legalrequirements.

In the light of the knowledge and understanding of the group and the parent company and their

environment obtained in the course of the audit, we have not identified any material misstatements

in the strategic report or the directors’ report.

13. CORPORATE GOVERNANCE STATEMENT

The Listing Rules require us to review the directors’ statement in relation to going concern, longer-

term viability and that part of the Corporate Governance Statement relating to the group’s

compliance with the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the Corporate Governance Statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

— the directors’ statement with regards to the appropriateness of adopting the going concern basis of

accounting and any material uncertainties identified set out on page 138;

— the directors’ explanation as to its assessment of the group’s prospects, the period this assessment

covers and why the period is appropriate set out on page 57;

— the directors’ statement on fair, balanced and understandable set out on page 103;

— the board’s confirmation that it has carried out a robust assessment of the emerging and principal

risks set out on pahes 81-86 ;

— the section of the annual report that describes the review of effectiveness of risk management and

internal control systems set out on pages 104-105; and

— the section describing the work of the audit committee set out on pages 102-106.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RATHBONES GROUP PLC CONTINUED

14. OPINION ON OTHER MATTER PRESCRIBED BY THE CAPITAL REQUIREMENTS

(COUNTRYBYCOUNTRY REPORTING) REGULATIONS 2013

In our opinion the information given in note 40 to the financial statements for the financial year

ended 31 December 2023 has been properly prepared, in all material respects, in accordance with

theCapital Requirements (Country-by Country Reporting) Regulations 2013.

15. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

15.1. ADEQUACY OF EXPLANATIONS RECEIVED AND ACCOUNTING RECORDS

Under the Companies Act 2006 we are required to report to you if, in our opinion:

— we have not received all the information and explanations we require for our audit; or

— adequate accounting records have not been kept by the parent company, or returns adequate

forour audit have not been received from branches not visited by us; or

— the parent company financial statements are not in agreement with the accounting records

andreturns.

We have nothing to report in respect of these matters.

15.2 DIRECTORS’ REMUNERATION

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of

directors’ remuneration have not been made or the part of the directors’ remuneration report to be

audited is not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

16. OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS

16.1. AUDITOR TENURE

Following the recommendation of the Audit Committee, we were appointed by shareholders on

9May 2019 to audit the financial statements for the year ended 31 December 2019 and subsequent

financial periods. The period of total uninterrupted engagement including previous renewals

andreappointments of the firm is 5 years, covering the years ended 31 December 2019 to

31December 2023.

16.2. CONSISTENCY OF THE AUDIT REPORT WITH THE ADDITIONAL REPORT TO THE

AUDIT COMMITTEE

Our audit opinion is consistent with the additional report to the audit committee we are

requiredtoprovide in accordance with ISAs (UK).

17. USE OF OUR REPORT

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part

16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the

company’s members those matters we are required to state to them in an auditor’s report and for no

other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to

anyone other than the company and the company’s members as a body, for our audit work, for this

report, or for the opinions we have formed.

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule

(DTR) 4115R – DTR 4118R, these financial statements will form part of the Electronic Format

Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with

DTR4115R – DTR 4118R. This auditor’s report provides no assurance over whether the Electronic

Format Annual Financial Report has been prepared in compliance with DTR 4115R – DTR 4118R.

Manbhinder Rana, FCA (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

5 March 2024

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2023

			2023	2022
		Note	£m	£m
Interest and similar income			128.8	46.3
Interest expense and similar charges			( 7 7. 1)	(28 .0)
Net interest income		4	51.7	18. 3
Fee and commission income			538 .6	4 6 2 .7
Fee and commission expense			(29. 7)	(2 7. 5)
Net fee and commission income		5	508.9	43 5. 2
Other operating income		6	10.5	2.4
Operating income			57 1 .1	4 55. 9
Charges in relation to client relationships and goodwill			(25 . 2)	(1 9. 5)
Acquisition-related and integration costs		9	(4 4 . 3)	(13. 5)
Other operating expenses			(444. 0)	(35 8. 8)
Operating expenses		7	(513 . 5)	(3 91. 8)
Profit before tax			5 7. 6	6 4 .1
Taxation		11	(20.1)	(1 5.1)
Profit after tax			3 7. 5	49. 0
Profit for the year attributable to equity holders of the company			3 7. 5	49. 0
Other comprehensive income:
Items that will not be reclassified to profit or loss
Net remeasurement of defined benefit asset/liability		29	(5. 8)	(7. 1)
Deferred tax relating to net remeasurement of defined benefit asset/liability		21	1.5	3.4
Other comprehensive income net of tax			(4 . 3)	(3 .7)
Total comprehensive income for the year net of tax attributable to equity holders of the company			33.2	4 5. 3
Dividends paid and proposed for the year per ordinary share		12	8 7. 0 p	8 4.0p
Dividends paid and proposed for the year			62.9	4 9. 3
Earnings per share for the year attributable to equity holders of the company:		13
—	basic		52.6p	83.6p
—	diluted		50. 8p	81. 5p

The accompanying notes form an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2023

			Share	Share	Merger	Own	Retained	Total
			capital	premium	reserve	shares	earnings	equity
		Note	£m	£m	£m	£m	£m	£m
At 1 January 2022			3.1	291. 0	7 7. 0	(36 .6)	288. 8	623.3
Profit for the year			−	−	−	−	49. 0	4 9.0
Net remeasurement of defined benefit liability		29	−	−	−	−	( 7. 1)	( 7. 1)
Deferred tax relating to components of other comprehensive income		21	−	−	−	−	3.4	3.4
Other comprehensive income net of tax			−	−	−	−	(3.7)	(3 .7)
Dividends paid		12	−	−	−	−	(4 8 .6)	(4 8 . 6)
Issue of share capital		30	0.1	1 9.0	−	−	−	19.1
Share-based payments:
—	cost of share-based payment arrangements	32	−	−	−	−	2 5.9	25. 9
—	cost of vested employee remuneration and share plans	32	−	−	−	−	(12 . 8)	(12 . 8)
—	cost of own shares vesting	31	−	−	−	2.7	(2.7)	−
—	cost of own shares acquired	31	−	−	−	(18 .7)	−	(18 .7)
—	tax on share-based payments		−	−	−	−	1.3	1.3
At 31 December 2022			3.2	310. 0	7 7. 0	(52. 6)	2 9 7. 2	634.8
Profit for the year			−	−	−	−	3 7. 5	3 7. 5
Net remeasurement of defined benefit asset		29	–	–	–	–	(5. 8)	(5. 8)
Deferred tax relating to components of other comprehensive income		21	–	–	–	–	1.5	1.5
Other comprehensive income net of tax			–	–	–	–	(4 . 3)	(4 . 3)
Dividends paid		12	–	–	–	–	(7 1. 4)	(7 1 .4)
Issue of share capital		30	2.2	2.3	74 7. 4	–	–	751. 9
Share-based payments:
—	cost of share-based payment arrangements	32	–	–	–	–	24. 0	24 .0
—	cost of vested employee remuneration and share plans	32	–	–	–	–	(6. 0)	(6 .0)
—	cost of own shares vesting	31	–	–	–	13.0	(13.0)	–
—	cost of own shares acquired	31	–	–	–	(16 .0)	–	(1 6.0)
—	tax on share-based payments		–	–	–	–	(0. 3)	(0. 3)
At 31 December 2023			5 .4	312 . 3	8 24 .4	(5 5.6)	263.7	1, 350. 2

The accompanying notes form an integral part of the consolidated financial statements.

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CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2023

			2023	2022
		Note	£m	£m
Assets
Cash and balances with central banks		14	1,03 8 .3	1,41 2 . 9
Settlement balances			165 .7	6 5. 8
Loans and advances to banks		15	266.9	19 4 .7
Loans and advances to customers		16	115.6	16 9. 8
Investment securities:
—	fair value through profit or loss	17	1.2	11. 2
—	amortised cost	17	1,294.6	1,0 4 5 . 2
Prepayments, accrued income and other assets		18	225. 3	126.7
Property, plant and equipment		19	1 6 .1	1 2 .7
Right-of-use assets		20	64.5	39.1
Current tax asset (UK)			3.9	3. 5
Intangible assets		22	1,02 5. 3	356. 2
Net defined benefit asset		29	7. 0	9.4
Total assets			4,224. 4	3 , 4 47. 2
Liabilities
Deposits by banks		23	12.4	1. 0
Settlement balances			1 7 2 .1	7 0.0
Due to customers		24	2, 253. 3	2 , 5 16 .1
Accruals and other liabilities		25	20 9.6	1 14 . 3
Provisions		26	25.5	12.9
Lease liabilities		27	74 . 9	5 0.5
Current tax liabilities (overseas)			0.5	0.2
Net deferred tax liability		21	86 .0	7. 5
Subordinated loan notes		28	39. 9	39.9
Total liabilities			2 , 8 74 . 2	2, 812 .4

		2023	2022
	Note	£m	£m
Equity
Share capital	30	5 .4	3.2
Share premium	30	312 . 3	310 . 0
Merger reserve	30	8 24 .4	7 7. 0
Own shares	31	(55. 6)	(52. 6)
Retained earnings		263.7	2 9 7. 2
Total equity		1, 350. 2	634. 8
Total liabilities and equity		4,224. 4	3 , 4 47. 2

The financial statements were approved by the board of directors and authorised for issue on 5 March

2024 and were signed on its behalf by:

Paul Stockton Iain Hooley

Group Chief Executive Officer Group Chief Financial Officer

Company registered number: 01000403

The accompanying notes form an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2023

			2023	2022
		Note	£m	£m
Cash flows from operating activities
Profit before tax			5 7. 6	6 4 .1
Change in fair value through profit or loss			(1 .0)	0. 3
Net interest income		4	(51. 7)	(18 . 3)
Recoveries on financial instruments		33	0.1	(0.1)
Net charge for provisions		26	9.4	2 .0
Depreciation, amortisation and impairment			4 7. 1	35.0
Foreign exchange movements		17	3.4	( 7. 1)
Defined benefit pension scheme (credits)		29	(0. 5)	(0. 3)
Defined benefit pension contributions paid		29	(2. 9)	(3. 9)
Share-based payment charges			24 .0	2 5.9
Interest paid			(6 7. 7 )	(2 0.9)
Interest received			111.9	33.9
			12 9.7	110 . 6
Changes in operating assets and liabilities:
—	net decrease in loans and advances to banks and customers		8 7. 4	8 .4
—	net decrease in settlement balance debtors		133. 3	3.9
—	net (increase)/decrease in prepayments, accrued income and
	other assets		(3 6 . 2)	1.9
—	net (decrease)/increase in amounts due to customers and
	deposits by banks		(251 . 5)	181. 9
—	net (decrease)/increase in settlement balance creditors		(123 .6)	9. 8
—	net increase/(decrease) in accruals, provisions and other
	liabilities		1.0	(5.9)

		2023	2022
	Note	£m	£m
Cash (used in)/generated from operations		(59. 9)	3 10. 5
Tax paid		(29 .5)	(1 7. 6 )
Net cash (outflow)/inflow from operating activities		(8 9.4)	292 .9
Cash flows from investing activities
Cash acquired on acquisition of subsidiaries	8	172 .6	−
Purchase of property, plant, equipment and intangible assets		(1 0.7)	(13 .1)
Payment of deferred consideration	8	–	(10 . 9)
Purchase of investment securities	17	(2,05 9.9)	(1, 2 6 2 . 5)
Proceeds from sale and redemption of investment securities	17	1 , 8 1 8 .1	9 8 4.4
Net cash used in investing activities		(79. 9)	(3 02 .1)
Cash flows from financing activities
Issue of ordinary shares	38	–	9. 3
Repurchase of ordinary shares	38	(1 6.0)	(18. 6)
Dividends paid	12	(7 1 .4)	(4 8 . 6)
Payment of lease liabilities	27	( 7. 5)	(8.5)
Interest paid		(5.6)	(5. 3)
Net cash used in financing activities		(100.5)	(7 1.7)
Net decrease in cash and cash equivalents		(26 9. 8)	(8 0.9)
Cash and cash equivalents at the beginning of the year		1,572. 7	1,6 5 3. 6
Cash and cash equivalents at the end of the year	38	1,3 02.9	1, 5 7 2 .7

The accompanying notes form an integral part of the consolidated financial statements.

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1 PRINCIPAL ACCOUNTING POLICIES

Rathbones Group Plc (‘the company’) is a public company limited by shares incorporated and

domiciled in England and Wales under the Companies Act 2006.

1.1 BASIS OF PREPARATION

The consolidated and company financial statements have been prepared in accordance with

UK-adopted International Accounting Standards. The company financial statements are presented on

pages 205 to 223.

The financial statements have been prepared on the historical cost basis, except for certain financial

instruments that are measured at fair value (notes 1es 1.9, 1.12, 1.16 and 1.18). The principal accounting

policies adopted are set out in this note and, unless otherwise stated, have been applied consistently

to all periods presented in the consolidated financial statements.

1.2 BASIS OF CONSOLIDATION

The consolidated financial statements incorporate the financial statements of the company and

entities controlled by the company (its subsidiaries), together ‘the group’, made up to 31 December

each year.

The group controls an entity when it is exposed to, or has rights to, variable returns from its

involvement with the entity and has the ability to affect those returns through its power over the

entity. Subsidiaries are fully consolidated from the date on which control is obtained, and no longer

consolidated from the date that control ceases; their results are included in the consolidated financial

statements up to the date that control ceases. Inter-company transactions and balances between

group companies are eliminated on consolidation.

1.3 DEVELOPMENTS IN REPORTING STANDARDS AND INTERPRETATIONS

Standards and interpretations affecting the reported results or the financial position

The following amendments to standards have been adopted in the current period, but have not had a

significant impact on the amounts reported in these financial statements:

— IFRS 17 Insurance Contracts

— Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2

— Definition of Accounting Estimates – Amendments to IAS 8

— Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to

IAS 12

— International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12)

Future new standards and interpretations

The following standards are effective for annual periods beginning on or after 1 January 2024 and

earlier application is permitted; however, the group has not early-adopted the amended standards in

preparing these consolidated financial statements.

None of these standards are expected to have a material impact on the group’s financial statements.

Standards available for early adoption	Effective date
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28)	Optional
Classification of liabilities as current or non-current (Amendments to IAS 1)	01 January 2024
Lease Liability in a Sale and Leaseback – Amendments to IFRS 16	01 January 2024
Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7	01 January 2024
IFRS S1 General Requirements for Disclosure of Sustainability-related	01 January 2024
Financial Information and IFRS S2 Climate-related Disclosures	01 January 2024
Lack of Exchangeability – Amendments to IAS 21	01 January 2024

1.4 BUSINESS COMBINATIONS

Business combinations are accounted for using the acquisition method. The consideration for each

acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets

transferred, liabilities assumed and equity instruments issued by the group in exchange for control of

the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a

contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent

changes in such fair values are adjusted against the cost of acquisition where they qualify as

measurement period adjustments. All other subsequent changes in the fair value of contingent

consideration classified as an asset or liability are accounted for in accordance with relevant asset /

liability recognition and measurement guidance in IFRS. Changes in the fair value of contingent

consideration classified as equity are not recognised.

NOTES TO THE CONSOLIDATED STATEMENTS

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1.5 GOING CONCERN

The directors have, at the time of approving the financial statements, a reasonable expectation that

the company and the group have adequate resources to continue in operational existence. In forming

this view, the directors have considered the company’s and the group’s prospects for a period of at

least 12 months from the date of approval of the annual report. The directors’ assessment included

consideration of the group’s profit and capital forecasts; the impact of capital and liquidity stress tests;

the impact of reverse stress testing and the management actions available to mitigate this impact.

The assessment also ensured that the assumptions applied were consistent with those used in other

forward-looking areas of the financial statements, such as impairment testing. The directors continue

to adopt the going concern basis of accounting in preparing the financial statements.

1.6 FOREIGN CURRENCIES

The functional and presentational currency of the company and its subsidiaries is sterling.

Transactions in currencies other than the relevant group entity’s functional currency are recorded at

the rates of exchange prevailing on the dates of the transactions. At each balance sheet date,

monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates

prevailing on the balance sheet date. Gains and losses arising on retranslation are included in profit or

loss for the year.

1.7 INCOME

Net interest income

Interest income or expense is recognised within net interest income using the effective interest method.

The effective interest method is the method of calculating the amortised cost of a financial asset or

liability (or group of assets and liabilities) and of allocating the interest income or interest expense

over the relevant period. The effective interest rate is the rate that exactly discounts the expected

future cash payments or receipts through the expected life of the financial instrument, or when

appropriate, a shorter period, to:

— the gross carrying amount of the financial asset; or

— the amortised cost of the financial liability.

The application of the method has the effect of recognising income (or expense) receivable (or

payable) on the instrument evenly in proportion to the amount outstanding over the period to

maturity or repayment. In calculating effective interest, the group estimates cash flows considering

all contractual terms of the financial instrument but excluding the impact of future credit losses.

The interest charged on the group’s lease liabilities and subordinated loan notes is included within

cash used in financing activities in the group statement of cash flows. Interest charged on client

funds is included within cash generated from operations.

Net fee and commission income

Portfolio or investment management fees, commissions receivable or payable and fees from advisory

services are recognised on a continuous basis over the period that the related service is provided.

Commission charges for executing transactions on behalf of clients are recognised when the

transaction is dealt at the trade date.

The group has made an assessment as to whether the work performed to earn such fees constitutes

the transfer of services and, therefore, fulfils any performance obligation(s). If so, then these fees are

recognised when the relevant performance obligation has been satisfied; if not, then the fees are only

recognised in the period in which the services are provided.

A breakdown of the timing of revenue recognition can be found in note 3.

Dividend income

Dividend income from final dividends on equity securities is accounted for on the date the security

becomes ex-dividend. Interim dividends are recognised when received.

Other income

The group invests cash held within client portfolios in cash securities with approved financial

institutions. The margin earned on these funds, being the difference between the rate of interest paid

by the custodian bank and that paid to clients, represents the rate of return available to the group

through the pooling of client funds. This margin is included within other operating income in the

financial statements.

1.8 LEASES

At inception of a contract, the group assesses whether a contract is, or contains, a lease. A contract is,

or contains, a lease if the contract conveys the right to control the use of an identified asset for a

period of time in exchange for consideration. To assess whether a contract conveys the right to

control the use of an identified asset, the group uses the definition of a lease in IFRS 16.

The group recognises a right-of-use asset and a lease liability at the inception date of the lease. The

right-of-use asset is initially measured at cost, which comprises the initial amount of the lease

liability adjusted for any lease payments made at or before the commencement date, plus any initial

direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to

restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets are subsequently depreciated on a straight-line basis over the shorter of the

expected life of the asset and the lease term, adjusted for any remeasurements of the lease liability. At

the end of each reporting period, the right-of-use assets are assessed for indicators of impairment in

accordance with IAS 36.

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The lease liability is initially measured at the present value of the lease payments that are not paid at

the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot

be readily determined, the group’s incremental borrowing rate. The group uses its incremental

borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

— fixed payments, including in-substance fixed payments

— variable lease payments that depend on an index or a rate, initially measured using the index or

rate as at the commencement date

— amounts expected to be payable under a residual value guarantee

— the exercise price under a purchase option that the group is reasonably certain to exercise, lease

payments in an optional renewal period if the group is reasonably certain to exercise an extension

option, and penalties for early termination of a lease unless the group is reasonably certain not to

terminate early.

The group’s incremental borrowing rate of 5ng rate of 5.642% is derived with reference to the group’s

subordinated loan notes (note 28), which is the only external financing on the consolidated

balancesheetnce sheet.

The lease liability is subsequently measured by adjusting the carrying amount to reflect the interest

charge, the lease payments made and any reassessment or lease modifications. The lease liability is

remeasured if the group changes its assessment of whether it will exercise a purchase, extension or

termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the

carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the

right-of-use asset has been reduced to zero.

Where the group is an intermediate lessor in a sub-lease, it accounts for its interests in the head lease

and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the

right-of-use asset arising from the head lease, not with reference to the underlying asset.

Leases that qualify for the low-value asset exemption or short-term lease exemption do not fall within

the scope of IFRS 16 and continue to be treated as off balance sheet.

1.9 SHAREBASESHARE-BASED PAYMENTS

The group engages in equity-settled and cash-settled share-based payment transactions in respect of

services received from its employees.

Equity-settled awards

For equity-settled share-based payments, the fair value of the award is measured by reference to the

fair value of the shares or share options granted on the grant date. The cost of the employee services

received in respect of the shares or share options granted is recognised in profit or loss over the

vesting period, with a corresponding credit to equity.

The fair value of the awards or options granted is determined using a binomial pricing model, which

takes into account the current share price, the risk-free interest rate, the expected volatility of the

company’s share price over the life of the option or award, any applicable exercise price and other

relevant factors. Only those vesting conditions that include terms related to market conditions are

taken into account in estimating fair value. Non-market vesting conditions are taken into account by

adjusting the number of shares or share options included in the measurement of the cost of employee

services so that, ultimately, the amount recognised in profit or loss reflects the number of vested

shares or share options, with a corresponding adjustment to equity. Where vesting conditions are

related to market conditions, the charges for the services received are recognised regardless of

whether or not the market-related vesting condition is met, provided that any non-market vesting

conditions are also met. Shares purchased and issued are recorded directly in equity.

Cash-settled awards

For cash-settled share-based payments, a liability is recognised for the services received, and the

related employer’s taxes, at the balance sheet date, measured at the fair value of the liability. At each

subsequent balance sheet date and at the date on which the liability is settled, the fair value of the

liability is remeasured with any changes in fair value recognised in profit or loss.

1.10 TAXATION

Current Tax

Current tax is the expected tax payable or receivable on net taxable income for the year. Current tax is

calculated using tax rates enacted or substantively enacted by the balance sheet date, together with

any adjustment to tax payable or receivable in respect of previous years.

Deferred tax

Deferred tax is accounted for under the balance sheet liability method in respect of temporary

differences using tax rates (and laws) that have been enacted or substantively enacted by the balance

sheet date and are expected to apply when the liability is settled or when the asset is realised.

Deferred tax liabilities are recognised for all temporary differences and deferred tax assets are

recognised to the extent that it is probable that taxable profits will be available against which

deductible temporary differences may be utilised, except where the temporary difference arises:

— from the initial recognition of goodwill;

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— from the initial recognition of other assets and liabilities in a transaction, which affects neither the

tax profit nor the accounting profit, other than in a business combination; or

— in relation to investments in subsidiaries and associates, where the group is able to control the

reversal of the temporary difference and it is the group’s intention not to reverse the temporary

difference in the foreseeable future.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same

taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised:

— in other comprehensive income if they relate to items recognised in other comprehensive income

— directly in retained earnings if they relate to items recognised directly in retained earnings.

1.11 CASH AND CASH EQUIVALENTS

Cash comprises cash in hand and demand deposits.

Demand deposits include balances with central banks which are realisable on demand.

Cash equivalents includes loans and advances to banks with a maturity of less than three months

from the date of acquisition.

For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of

cash and cash equivalents as defined above, net of outstanding bank overdrafts (overnight cash book

overdraft balances – Note 23), which are included in the group’s cash management.

1.12 FINANCIAL ASSETS

Initial recognition and measurement

Financial assets, excluding trade debtors, are initially recognised when the group becomes party to

the contractual provisions of the asset. Trade debtors are recognised when cash is advanced to the

borrowers.

Financial assets are initially recognised at fair value plus transaction costs that are directly

attributable to their acquisition (except those assets classified at fair value through profit or loss).

Trade debtors without a significant financing component are initially measured at the

transactionprion price.

Financial assets are not reclassified subsequent to their initial recognition unless the group changes

its business model for managing financial assets, in which case all affected financial assets are

reclassified on the first day of the first reporting period following the change in the business model.

For settlement balances, trade date accounting is applied to all regular way purchases and sales

ofasof assets .

Classification and subsequent measurement

Financial assets are classified and measured in the following categories:

— amortised cost

Financial assets are measured at amortised cost if their contractual terms give rise to cash flows

that are solely payments of principal and interest on the principal amount outstanding and they

are held within a business model whose objective is to hold assets to collect contractual cash flows.

Assets are measured at amortised cost using the effective interest rate method (note 1.7), less any

impairment losses. Interest income, foreign exchange gains and losses and impairment are

recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

— at fair value through other comprehensive income (FVOCI)

Debt instruments are measured at FVOCI if their contractual terms give rise to cash flows that are

solely payments of principal and interest on the principal amount outstanding and they are held

within a business model whose objective is both to hold assets to collect contractual cash flows

and to sell the assets.

For debt instruments, interest income is calculated using the effective interest method. For equity

instruments, dividends are recognised as income in profit or loss unless the dividend clearly

represents a recovery of part of the cost of the investment. All other gains and losses on assets at

FVOCI are recognised in OCI.

— at fair value through profit or loss (FVTPL)

All equity instruments are measured at FVTPL unless the instrument is not held for trading, the

group irrevocably elects to measure the instrument at FVOCI. This election is made on an

investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are

measured at FVTPL. On initial recognition, the group may irrevocably designate a financial asset

that otherwise meets the requirements to be measured at amortised cost or FVOCI at FVTPL if

doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

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Business model assessment

The group assesses the objective of the business model in which a financial asset is held at a portfolio

level. The information considered includes:

— the objectives for the portfolio and how those tie in to the current and future strategy of the group

— how the performance of the portfolio is evaluated and reported to the group’s management

— the risks that affect the performance of the business model (and the financial assets held within

that business model) and how those risks are managed

— how group employees are compensated, e.g. whether compensation is based on the fair value of the

assets managed or the contractual cash flows collected

— the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such

sales and expectations about future sales activity.

Payments of principal and interest criterion

In assessing whether the contractual cash flows are solely payments of principal and interest, the

group considers:

— the contractual terms of the instrument, checking consistency with basic lending criteria

— the impact of the time value of money

— features that would change the amount or timing of contractual cash flows

— other factors, such as prepayment or extension features.

Derecognition

Financial assets are derecognised when the contractual rights to receive cash flows have expired or

the group has transferred substantially all the risks and rewards of ownership.

Impairment of financial assets

The group recognises loss allowances for expected credit losses (ECLs) on financial assets measured

at amortised cost and FVOCI and loan commitments held off balance sheet.

A financial asset will attract a loss allowance equal to either:

— 12-month ECLs (losses resulting from possible defaults within the next 12 months); or

— lifetime ECLs (losses resulting from possible defaults over the remaining life of the financial asset).

The latter applies if there has been a significant deterioration in the credit quality of the asset; albeit

lifetime ECLs will always be recognised for trade receivables, contract assets or lease receivables

without a significant financing component.

The maximum period considered when estimating ECLs is the maximum contractual period over

which the group is exposed to credit risk .

The group measures loss allowances at an amount equal to lifetime ECLs, except for treasury book

and investment management loan book exposures (see note 33) for which credit risk has not

increased significantly since initial recognition, which are measured at 12-month ECLs.

Loss allowances for trust and financial planning debtors are always measured at an amount equal to

lifetime ECLs.

When assessing whether the credit risk of a financial asset has increased significantly between the

reporting date and initial recognition, quantitative and qualitative indicators are used. More detail

can be found at note 33.

Measurement of ECLs

Treasury book and investment management loan book

The group has developed a model for calculating ECLs on its treasury book and investment

management loan book (which includes loan commitments held off balance sheet). The group has

developed three different economic scenarios: a base case, an upside and a downside.

The base case is assigned a 60% probability of occurring with the upside and downside each assigned

a 20% probability of occurring.

The economic scenarios are based on the projections of GDP, inflation, unemployment rates, house

price indices, financial markets and interest rates as set out in the banking system stress testing

scenario published annually by the PRA.

Management adjust the projections for the economic variables in arriving at the upside and

downsidesnside scenarios.

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Under each resultant scenario, an ECL is forecast for each exposure in the treasury book and

investment management loan book. The ECL is calculated based on management’s estimate of the

probability of default, the loss given default and the exposure at default of each exposure taking into

account industry credit loss data, the group’s own credit loss experience, the expected repayment

profiles of the exposures and the level of collateral held. Industry credit loss information is drawn

from data on credit defaults for different categories of exposure published by the Council of Mortgage

Lenders and Standard & Poor’s.

The model adopts a staging allocation methodology, primarily based on changes in the internal and/

or external credit rating of exposures to identify significant increases in credit risk since inception of

the exposure.

The group has not rebutted the presumption that if an exposure is more than 30 days past due,

theathe associated credit risk has significantly increased.

More detail on the group’s staging criteria is provided in note 33.

ECLs are discounted back to the balance sheet date at the effective interest rate of the asset.

Trust and financial planning debtors

The group’s trust and financial planning debtors are generally short term and do not contain

significant financing components. Therefore, the group has applied a practical expedient by using a

provision matrix to calculate lifetime ECLs based on actual credit loss experience over the past four

years.

Credit-impaired financial assets

At each reporting date, the group assesses whether financial assets carried at amortised cost and

FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a

detrimental impact on the estimated future cash flows of the financial asset have occurred. The

group’s definition of default is given in note 33.

Presentation of impairment

The carrying amount of financial assets measured at amortised cost is reduced by a loss allowance.

The carrying value of assets measured at FVOCI, is not adjusted by loss allowance but instead the loss

allowance is recorded in equity.

Impairment losses related to the group’s treasury book and investment management loan book are

presented in ‘interest expense and similar charges’ and those related to all other financial assets

(including trust and financial planning debtors) are presented under ‘other operating expenses’.

NolossNo losses are presented separately on the statement of the comprehensive income and there have

been no reclassifications of amounts previously recognised under IAS 39.

1.13 PROPERTY, PLANT AND EQUIPMENT

All property, plant and equipment is stated at historical cost, which includes directly attributable

acquisition costs, less accumulated depreciation and impairment losses. Depreciation is charged so as

to write off the cost of assets to their estimated residual value over their estimated useful lives, using

the straight-line method, on the following bases:

— leasehold improvements: over the lease term

— plant, equipment and computer hardware: over three to 10 years.

The assets’ residual lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains

and losses on disposals are determined by comparing proceeds with the carrying amount and these

are included in profit or loss.

1.14 INTANGIBLE ASSETS

Goodwill

Goodwill arises through business combinations and represents the excess of the cost of acquisition

over the group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities

of a business at the date of acquisition.

Goodwill is recognised as an asset and measured at cost less accumulated impairment losses. It is

allocated to groups of cash-generating units, which represent the lowest level at which goodwill is

monitored for internal management purposes. Cash-generating units are identified as the smallest

identifiable group of assets that generates cash inflows that are largely independent of the cash

inflows from other assets or groups of assets, and are no larger than the group’s operating segments,

as set out in note 3.

On disposal of a subsidiary the attributed amount of goodwill that has not been subject to

impairment is included in the determination of the profit or loss on disposal.

Client relationships

Client relationships acquired as part of a business combination are initially recognised at fair value

(note 1.4). Determining whether a transaction that involves the purchase of client relationships is

treated as a business combination or a separate purchase of intangible assets requires judgement. The

factors that the group takes into consideration in making this judgement are set out in note 2n note 2.1.

Individually purchased client relationships are initially recognised at cost. Where a transaction to

acquire client relationship intangible assets includes an element of variable deferred consideration,

an estimate is made of the value of consideration that will ultimately be paid. The client relationship

intangible asset recognised on the balance sheet is adjusted for any subsequent change in the value

of deferred consideration. Note 2ion. Note 2.1 sets out the approach taken by the group where judgement is

required to determine whether payments made for the introduction of client relationships should be

capitalised as intangible assets or charged to profit or loss.

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Client relationship intangible assets are subsequently carried at the amount initially recognised less

accumulated amortisation, which is calculated using the straight-line method over their estimated

useful lives (normally 10 to 15 years, but not more than 15 years).

Computer software and software development costs

Costs incurred to acquire and bring to use computer software licences are capitalised and amortised

through profit or loss over their expected useful lives (three to four years).

Costs that are directly associated with the production of identifiable and unique software products

controlled by the group are recognised as intangible assets when the group is expected to benefit

from future use of the software and the costs are reliably measurable. Other costs of producing

software are charged to profit or loss as incurred. Computer software development costs recognised

as assets are amortised using the straight-line method over their useful lives (not exceeding

fouryeafour years).

Where services provided by a software-as-a-service arrangement do not result in the recognition of

an intangible asset, non-distinct configuration and customisation costs are expensed when access to

the software is provided. The cost is spread over the contractual term.

1.15 IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS

At each balance sheet date, the group reviews the carrying amounts of its intangible assets to

determine whether there is any indication that those assets have suffered an impairment loss. If any

such indication exists, the recoverable amount of the asset is estimated in order to determine the

extent of the impairment loss (if any). Where the asset does not generate cash flows that are

independent from other assets, the group estimates the recoverable amount of the cash-generating

unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell

and value in use. In assessing value in use, the estimated future cash flows are discounted to their

present value using a pre-tax discount rate that reflects current market assessments of the time value

of money.

Goodwill is tested for impairment at least annually. For the purposes of impairment testing, goodwill

is allocated to groups of cash-generating units. The carrying amount of each group of cash-generating

units is compared to its value in use, calculated using a discounted cash flow method. If the

recoverable amount of the group of cash-generating units is less than the carrying amount of the

group of units, the impairment loss is allocated first to reduce the carrying amount of the goodwill

allocated to that group of units and then to the other assets of the group of units pro rata on the basis

of the carrying amount of each asset in the group of units.

Client relationship intangibles assets are tested for impairment bi-annually by comparing the fair

value of funds under management and administration for each individually acquired client

relationship, (or, for client relationships acquired with a business combination, each acquired

portfolio of clients), with their associated expected value of funds under management and

administration, as based on the useful lives of the client relationships. An example of evidence of

impairment would be lost client relationships. In determining whether a client relationship is lost, the

group considers factors such as the level of funds withdrawn and the existence of other retained

family relationships. When client relationships are lost, the full amount of unamortised cost is

recognised immediately in profit or loss and the intangible asset is derecognised.

If the recoverable amount of any asset other than goodwill or client relationships is estimated to be

less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.

Any impairment loss is recognised immediately in profit or loss.

1.16 FINANCIAL LIABILITIES

Initial recognition and measurement

Financial liabilities are initially recognised at fair value plus transaction costs that are directly

attributable to their acquisition or issue.

Classification and subsequent measurement

Financial liabilities are classified as measured at amortised cost or at fair value through profit or loss.

The group has not designated any liabilities as fair value through profit or loss and holds no liabilities

as held for trading. Financial liabilities are measured at amortised cost using the effective interest

method (note 1.7). Amortised cost is calculated by taking into account any issue costs and any

discounts or premiums on settlement. Interest expense and foreign exchange gains and losses are

recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

For settlement balances, trade date accounting is applied to all regular way purchases and sales

ofasof assets.

Derecognition

The group derecognises financial liabilities when its contractual obligations are discharged, cancelled

or expired, or when the financial liability is substantially modified.

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161RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

1 PRINCIPAL ACCOUNTING POLICIES CONTINUED

1.17 PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognised when the group has a present obligation (legal or constructive) as a result of

a past event and it is probable that an outflow of economic benefits, that can be reliably estimated,

will occur. Provisions are measured at the present value of the expenditures expected to be required

to settle the obligation, discounted using a pre-tax rate that reflects current market assessments of

the time value of money and the risks specific to the obligation.

Contingent liabilities are possible obligations that depend on the outcome of uncertain future events

or those present obligations where the outflows of resources are uncertain or cannot be measured

reliably. Contingent liabilities are not recognised in the financial statements but are disclosed unless

the likelihood of crystallisation is judged to be remote.

1.18 RETIREMENT BENEFIT OBLIGATIONS ON RETIREMENT BENEFIT SCHEMES

The group’s net liability/asset in respect of defined benefit pension plans is calculated separately for

each plan by estimating the amount of future benefit that employees have earned in return for their

service in the current and prior years; that benefit is discounted to determine its present value, and

the fair value of any plan assets (at bid price) is deducted. Any asset resulting from this calculation is

limited to the present value of available refunds and reductions in future contributions to the plan.

The cost of providing benefits under defined benefit plans is determined using the projected unit

credit method, with actuarial valuations being carried out at each balance sheet date. Net

remeasurements of the defined benefit liability/asset are recognised in full in the period in which

they occur in other comprehensive income.

Past service costs or gains are recognised in profit or loss immediately in the period of a plan

amendment. Interest income on defined benefit assets and interest expense on the defined benefit

obligations are also recognised in profit or loss in the period.

The amount recognised in the balance sheet for death-in-service benefits represents the present

value of the estimated obligation, reduced by the extent to which any future liabilities will be met by

insurance policies.

The company determines the net interest on the net defined benefit liability/asset for the year by

applying the discount rate used to measure the defined benefit obligation at the beginning of the year

to the net defined benefit liability/asset.

Contributions to defined contribution retirement benefit schemes are charged to profit or loss as an

expense as they fall due.

1.19 SEGMENTAL REPORTING

The group determines and presents operating segments based on the information that is provided

internally to the group executive committee, which is the group’s chief operating decision-maker.

Operating segments are organised around the services provided to clients.

Transactions between operating segments are reported within the income or expenses for those

segments; intra-segment income and expenditure is eliminated at group level. Indirect costs are

allocated between segments in proportion to the principal cost driver for each category of indirect

costs that is generated by each segment.

IW&I has been identified as a separate operating segment of the group. The results of the segment

have been presented in aggregate with the group’s Wealth Management segment, on the basis that

their long-term characteristics are expected to align following the initial integration period of

thebuthe business.

1.20 FIDUCIARY ACTIVITIES

The group commonly acts as trustee and in other fiduciary capacities that result in the holding or

placing of assets on behalf of individuals, trusts, retirement benefit plans and other institutions. Such

assets and income arising thereon are excluded from these financial statements, as they are not

assets of the group. Largely as a result of cash and settlement processing, the group holds money on

behalf of some clients in accordance with the Client Money Rules of the Financial Conduct Authority,

the Jersey Financial Services Commission and the Solicitors’ Accounts Rules issued by the Solicitors

Regulation Authority, as applicable. Such monies and the corresponding amounts due to clients are

not shown on the balance sheet as the group is not beneficially entitled to them.

1.21 MERGER RESERVE

The merger reserve is used where more than 90% of the share capital in a subsidiary is acquired, and

the consideration includes the issue of new shares by the Company, thereby attracting merger relief

under Section 612 of the Companies Act 2006.

1.22 FAIR VALUE MEASUREMENT

The fair values of quoted financial instruments in active markets are based on current bid prices.

Such instruments would be included in level 1 of the fair value hierarchy. If an active market for a

financial asset does not exist, the group establishes fair value by using valuation techniques. These

include the use of recent arm’s-length transactions, discounted cash flow analysis, option pricing

models and other valuation techniques commonly used by market participants. These instruments

would be classified under level 3 in the fair value hierarchy.

The group recognises transfers between levels of the fair value hierarchy at the end of the reporting

period during which the change has occurred.

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162RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

The group makes judgements and estimates that affect the application of the group’s accounting

policies and reported amounts of assets, liabilities, income and expenses within the next financial

year. Estimates and assumptions are continually evaluated and are based on historical experience

and other factors, including expectations of future events that are believed to be reasonable under

the circumstances.

The following key accounting policies involve critical judgements made in applying the accounting

policy and involve material estimation uncertainty.

2.1 CLIENT RELATIONSHIP INTANGIBLES (NOTE 22)

Critical judgements

Client Relationship intangibles purchased through corporate transactions

When the group purchases client relationships through transactions with other corporate entities, a

judgement is made as to whether the transaction should be accounted for as a business combination

or as a separate purchase of intangible assets. In making this judgement, the group assesses the

assets, liabilities, operations and processes that were the subject of the transaction against the

definition of a business combination in IFRS 3. In particular, consideration is given to whether

ownership of a corporate entity has been acquired, among other factors.

Payments to newly recruited investment managers

The group assesses whether payments made to newly recruited investment managers under

contractual agreements represent payments for the acquisition of client relationship intangible assets

or remuneration for ongoing services provided to the group. If these payments are incremental costs

of acquiring investment management contracts and are deemed to be recoverable (i.e. through future

revenues earned from the FUMA that relate to the investment management contract), they are

capitalised as client relationship intangible assets (note 22). Otherwise, they are judged to be in

relation to the provision of ongoing services and are expensed as remuneration cost in the period that

they are transferred. Upfront payments made to investment managers upon joining are expensed as

incurred, as they are not judged to be incremental costs for acquiring the client relationships.

Estimation uncertainty

Amortisation of client relationship intangible assets

The group makes estimates as to the expected duration of client relationships to determine the

period over which related intangible assets are amortised. The amortisation period is estimated with

reference to historical data on the longevity of client relationships. During the year, client relationship

intangible assets were amortised over a period of between 10 and 15 years.

Amortisation of £252 m.2 million (2022: £195 m.5 million was charged during the year). At 31 December

2023, the carrying value of client relationship intangible assets was £5022.7 million (2022: £175

million). A reduction of one year in the amortisation period of the group’s client relationship

intangible assets would increase the annual amortisation charge by £44.0 million.

2.2 RETIREMENT BENEFIT OBLIGATIONS (NOTE 29)

Critical judgements

Key judgement was applied in determining that the group will be eligible to receive the surplus

associated with the pension schemes in recognising a pension asset.

Estimation uncertainty

The principal assumptions underlying the reported surplus of £7.0 million (2022: £9.4 million

surplus) are set out in note 29.

In order to set these assumptions, the group engages qualified actuaries to estimate a range of

long-term trends and market conditions to determine the value of the surplus or deficit on the group’s

retirement benefit schemes, based on the group’s expectations of the future. Long-term forecasts and

estimates are inherently highly subjective and subject to risk that actual events may be significantly

different to those forecast. If actual events deviate from the assumptions made by the group then the

reported surplus or deficit in respect of retirement benefit obligations may be materially different

from that recognised.

The sensitivities of the retirement benefit obligations to changes in all of the underlying estimates are

set out in note 29. Of these, the most sensitive assumption is the discount rate used to measure the

defined benefit obligation. Increasing the discount rate by 05% w.5% would decrease the schemes’

liabilities by £7.7 million (2022: £7.1 million). Increasing the future rate of inflation by 0ation by 0.5% would

increase the schemes’ liabilities by £44.4 million (2022: £50 mi.0 million). A lower or higher movement in

these assumptions would result in multiples of these figures. A 05.5% decrease would reduce the

scheme’s liabilities by £42.2 million.

2.3 BUSINESS COMBINATIONS (NOTE 8)

2.3.1 Investec Wealth & Investment

During the year, the group acquired the entire share capital of Investec Wealth & Investment (‘IW&I’).

The group has accounted for the transaction as a business combination. Note 8 contains further

detail on the areas of significant judgement and critical accounting estimates outlined below.

Estimation uncertainty

Fair value of consideration transferred

Total consideration transferred to Investec Bank Plc comprised 270,05656,463 ordinary shares and

1748,4811,868 convertible non-voting ordinary shares. The fair value of the ordinary shares issued was

determined with reference to the share price of Rathbones Group Plc at close of business on 20

September 2023 (being the day before legal completion of the transaction), which was £172.22 per

share at close. The fair value of the non-voting shares of £166.36 was calculated by applying a 5ng a 5.0%

discount to the closing share price of £1722, t.22, to reflect the fact that the shares are non-marketable

and non-transferable. This produced a total value for consideration paid of £7511.9 million. A 20ion. A 2.0%

decrease in the discount applied would have resulted in a £60 mi.0 million increase in the value of the

consideration paid; an increase in the discount would have had an equal and opposite effect.

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2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

CONTINUED

Fair value of goodwill and net assets acquired

The fair value of net assets acquired was valued at £4118 m.8 million (see note 8 for a

detailedbled breakdown).

Goodwill of £3401 mi.1 million was recognised at acquisition, and represents the future economic benefit

expected from an acquired workforce, expected future growth and future client relationships, as well

as operational and revenue synergies. The allocation of goodwill between the group’s cash-generating

units has been based on their respective relative values.

Client relationship intangible assets of £3500.3 million were recognised during the year in relation to

the acquisition of IW&I. The multi-period earnings model used to value the intangible assets used

estimates of client longevity and investment performance to derive a series of discounted cash flows.

This was determined with reference to management’s best estimates of future performance and

estimates of the return required to determine an appropriate discount rate. These assets are being

amortised over an average 14-year useful life. A 5fe. A 5.0% increase in the estimated fair value of client

relationship intangible assets would increase client relationship assets by £175 mi.5 million, with a

corresponding increase in deferred tax liabilities of £44.4 million and a decrease in goodwill of £13.1

million.

The group has applied judgement in determining the allocation of acquired goodwill to the relevant

cash-generating units expected to benefit from the acquisition. The allocation of goodwill is

provisional and shall be reviewed and completed before the end of the first annual period after the

acquisition. See note 22.

Other areas of focus

The financial statements include other accounting estimates related to the acquisition of IW&I. While

these areas do not meet the definition under IAS 1 of significant accounting estimates or critical

accounting judgements, the recognition and measurement of certain material balances are based on

assumptions and/or are subject to longer term uncertainties.

Estimation uncertainty

Fair value of equity-settled awards

Share-based incentive awards were granted to certain IW&I employees as part of the acquisition (see

note 8). These awards require the recipients to remain in employment for a specific period, and to

achieve certain conditions relating to the integration of IW&I. The awards will be accounted for as

remuneration for ongoing services and will be expensed over the deferral period. The cumulative

expense at year end of £3.1 million reflects the number of equity instruments granted that are

expected to ultimately vest, as based on expected future attrition rates. A decrease of 10% in the total

unvested options outstanding at year end would decrease the profit or loss charge for the last quarter

of the year by £03 m.3 million, and therefore this is not considered to be a material estimate.

2.3.2 Saunderson House

Estimation uncertainty

In 2021, the group acquired the entire share capital of Saunderson House Limited as part of a

business combination. The equity-settled deferred payments that are contingent on the recipients

remaining employees of the group for a specific period are accounted for as remuneration for ongoing

services from employment. The group’s estimate of the amounts ultimately payable will be expensed

over the deferral period.

The Saunderson House management incentive scheme is subject to the achievement of certain

operational and performance targets at 31 December 2024. A profit or loss charge has been

recognised in equity for the expected consideration payable. Under the terms of the agreements, the

award is calculated as 0ated as 0.1% of funds under management (‘FUM’) at the test date of 31 December

2024. The FUM award ranges from a payment of £nil to a maximum possible payment in shares of

£75 mi.5 million; £05.5m of this pool has already been granted to a group of employees. In addition to this

are integration and discretionary awards, capped at £10m and £0.0m and £05.5m, respectively.

The minimum threshold for pay-out of this award was previously £50 bil.0 billion in FUM; this was

reduced to £35 bil.5 billion during the year, following review by the Group Executive Committee, to

rebase the scheme to reflect current market conditions. Management’s best estimate of the FUM

award at the year end was £48 m.8 million, and is based on expected funds under management at 31

December 2024. The discretionary and integration awards are expected to be paid infn full.

The maximum FUM award of £75 mi.5 million would result in an additional charge to profit or loss in

2023 of £10 mi.0 million. A payment of £nil would result in a reversal of the accumulated profit or loss

charge since commencement of the award of £33.7 million in 2023.

3 SEGMENTAL INFORMATION

IFRS 8 requires operating segments to be identified on the basis of internal reports about

components of the group that are regularly reviewed by the chief operating decision-maker, which

takes the form of the Group Executive Committee, in order to allocate resources to the segment and to

assess its performance.

For management purposes, the group is organised into two operating segments: Wealth Management

and Asset Management. Centrally incurred indirect expenses are allocated to these operating

segments on the basis of the cost drivers that generate the expenditure; principally, these are the

headcount of staff directly involved in providing those services from which the segment earns

revenues, the value of funds under management and administration and the segment’s total revenue.

The allocation of these costs is shown in a separate column in the table below, alongside the

information presented for internal reporting. Wealth Management Segmental Assets relate to assets

held within the Investment Management, Banking and Trust Business Segments. Asset Management

Segmental Assets are assets held solely within the Asset Management Business Segment.

Unallocated Segmental Assets relate to the Net Defined Benefit Asset held on the balance sheet.

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3 SEGMENTAL INFORMATION CONTINUED

IW&I has been identified as a separate operating segment of the group. The results of the segment have been presented in aggregate with the group’s Wealth Management segment, on the basis that their long-term

characteristics are expected to align following the initial integration period of the business.

31 December 2023

	Wealth	Asset	Indirect
	Management	Management	expenses	Total
	£m	£m	£m	£m
Net investment management fee income	350.1	64.7	–	414.8
Net commission income	53.6	–	–	53.6
Net interest income	49.9	1.8	–	51.7
Fees from advisory services and other income	50.3	0.7	–	51.0
Operating income	503.9	67. 2	–	571.1
Staff costs − fixed	(147.2)	( 7.1)	(51.8)	(206.1)
Staff costs − variable	(78.2)	(13.4)	(15.9)	(107.5)
Total staff costs	(225.4)	(20.5)	(6 7.7 )	(313.6)
Other direct expenses	(53.7)	(12.2)	(64.5)	(130.4)
Allocation of indirect expenses	(119.4)	(12.8)	132.2	–
Underlying operating expenses	(398.5)	(45.5)	–	(444.0)
Underlying profit before tax	105.4	21.7	–	127.1
Charges in relation to client relationships and goodwill (note 22)	(25.2)	–	–	(25.2)
Acquisition-related costs (note 9)	(11.0)	–	(33.3)	(44.3)
Segment profit before tax	69.2	21.7	(33.3)	57.6
Profit before tax attributable to equity holders of the company	–	–	–	57.6
Taxation (note 11)	–	–	–	(20.1)
Profit for the year attributable to equity holders of the company	–	–	–	37. 5

	Wealth	Asset
	Management	Management	Unallocated	Total
	£m	£m	Assets £m	£m
Segment total assets	4,099.6	117.8	7.0	4,224.4

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3 SEGMENTAL INFORMATION CONTINUED

31 December 2022

		Wealth	Asset	Indirect
		Management	Management	expenses	Total
		£m	£m	£m	£m
Net investment management fee income		274.8	62262.2	−	3377. 0
Net commission income		4898.9	−	−	4898.9
Net interest income		177.8	00.5	−	18.3
Fees from advisory services and other income		51451.4	030.3	−	517.7
Operating income		3929.9	63063.0	−	455955.9
Staff costs – fixed		(1099.5)	(77.0)	(42.0)	(1585.5)
Staff costs – variable		(669.9)	(11.2)	(90)	(8 77.1)
Total staff costs		(176.4)	(18.2)	(51051.0)	(2456)
Other direct expenses		(41.5)	(96)	(62.2)	(1133.3)
Allocation of indirect expenses		(104.4)	(88)	1133.2	−
Underlying operating expenses		(322.3)	(3666.6)	−	(35898.9)
Underlying profit before tax		70670.6	26426.4	−	977.0
Charges in relation to client relationships and goodwill (note 22)		(195)	−	−	(1959.5)
Acquisition-related costs (note 9)		(10.0)	−	(34)	(134)
Segment profit before tax		41141.1	264.4	(34)	641.1
Profit before tax attributable to equity holders of the company		−	−	−	641.1
—	Taxation (note 11)	−	−	−	(151)
Profit for the year attributable to equity holders of the company		−	−	−	4909.0

	Wealth	Asset
	Management	Management	Unallocated Assets	Total
	£m	£m	£m	£m
Segment total assets	33,3234323.4	114.4	9.4	3,4 477. 2

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3 SEGMENTAL INFORMATION CONTINUED

The following table reconciles underlying operating expenses to operating expenses:

	2023	2022
	£m	£m
Underlying operating expenses	444.0	3588.8
Charges in relation to client relationships and goodwill (note 22)	25.2	19519.5
Acquisition-related costs (note 9)	44.3	1313.5
Operating expenses	513.5	391391.8

GEOGRAPHIC ANALYSIS

The following table presents operating income analysed by the geographical location of the group

entity providing the service:

	2023	2022
	£m	£m
United Kingdom	553.4	44202.0
Channel Islands	17.7	13813.8
Rest of the World	–	010.1
Operating income	571.1	455955.9

The following is an analysis of the carrying amount of non-current assets analysed by the

geographical location of the assets:

	2023	2022
	£m	£m
United Kingdom	1,103.0	40464.6
Channel Islands	2.9	343.4
Non-current assets	1,105.9	4080.0

TIMING OF REVENUE RECOGNITION

The following table presents operating income analysed by the timing of revenue recognition of the

operating segment providing the service:

	2023		2022
	Wealth	Asset	Wealth	Asset
	Management	Management	Management	Management
	£m	£m	£m	£m
Products and services transferred
at a point in time	44.4	–	4141.2	−
Products and services transferred
over time	459.5	67. 2	3517.7	63063.0
	503.9	67. 2	3929.9	63063.0

MAJOR CLIENTS

The group is not reliant on any one client or group of connected clients for generation of revenues.

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4 NET INTEREST INCOME

	2023	2022
	£m	£m
Interest income
Cash and balances with central banks	56.3	2373.7
Amortised cost investment securities	56.1	127.7
Loans and advances to banks	7.9	33.5
Loans and advances to customers	8.5	646.4
	128.8	46346.3
Interest expense
Due to customers	(71.6)	(227)
Lease liabilities	(3.2)	(30)
Subordinated loan notes (note 28)	(2.3)	(23)
	( 7 7.1)	(280.0)
Net interest income	51.7	1818.3

All net interest income is calculated using the effective interest method (note 1.7).

5 NET FEE AND COMMISSION INCOME

	2023	2022
	£m	£m
Fee and commission income
Wealth Management	469.0	39454.5
Asset Management	69.6	68268.2
	538.6	4627.7
Fee and commission expense
Wealth Management	(26.2)	(233.3)
Asset Management	(3.5)	(4.2)
	(29.7)	(2 77.5 )
Net fee and commission income	508.9	43535.2

6 OTHER OPERATING INCOME

	2023	2022
	£m	£m
Credit Impairment Gains/(Losses) On Financial Assets Measured
At Fair Value	1.1	(040.4)
Income from equity shares	7.7	−
Other operating income	1.7	282.8
	10.5	242.4

Other operating income of £100.5 million (2022: £2.4 million) comprised gains and losses from fair

value through profit or loss equity securities of £1.1 million (2022: £0(05) mil.5) million), net client money

interest income £7.7 million (2022: £nil) of which £64 mi.4 million relates to IW&I and other operating

income of £1.7 million (£2.8 million).

7 OPERATING EXPENSES

	2023	2022
	£m	£m
Staff costs (note 10)	313.6	2456245.6
Depreciation and impairment charges of property, plant and equipment
(note 19)	5.2	474.7
Depreciation and impairment charges of right-of-use assets (note 20)	6.5	565.6
Amortisation of internally generated intangible assets (note 22)	1.8	11.5
Amortisation and impairment of purchased software (note 22)	3.8	363.6
Auditor's remuneration (see below)	3.0	111.1
Impairment (recoveries)/charges on loans and advances to customers
(note 33)	0.1	(01)
Rental charge	3.5	21.1
Other	106.5	947.7
Other operating expenses	444.0	3588.8
Charges in relation to client relationships and goodwill (note 22)	25.2	19519.5
Acquisition-related costs (note 9)	44.3	1313.5
Total operating expenses	513.5	391391.8

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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168RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

7 OPERATING EXPENSES CONTINUED

The property, plant and equipment depreciation and impairment charge differs to the amount in Note

19 predominantly due to £1.7 million accelerated depreciation on fixtures and fittings, which has

been treated as acquisition-related costs (note 9).

The right-of-use asset depreciation and impairment charge differs to the amount in Note 20

predominantly due to £1.1 million accelerated depreciation and impairment on leases within the

Group, which has been treated as acquisition-related costs (note 9).

Other expenses largely comprise costs relating to other staff costs £111.0 million (2022: £8: £8.4 million);

settlement, admin and dealing charges £100.7 million (2022: £98 m.8 million); client costs £5.1 million

(2022: £32 mi3.2 million); marketing costs £6.1 million (2022: £33 m.3 million); IT and licenses costs £459 .9

million (2022: £4040.0 million) and legal and professional costs £78 mi.8 million (2022: £42 mi4.2 million).

A more detailed analysis of auditor’s remuneration is provided below:

		2023	2022
		£m	£m
Fees payable to the company’s auditor for the audit of the company’s
annual financial statements		0.7	010.1
Fees payable to the company’s auditor and their associates for other services to the group:
—	audit of the company’s subsidiaries pursuant to legislation	1.0	00.6
—	audit-related assurance services	1.2	050.5
—	other services	0.1	−
		3.0	11.2

Audit-related assurance services includes costs relating to audits of the group’s client money and

independent reporting to third parties on internal controls under ISAE 3402.

8 BUSINESS COMBINATIONS

INVESTEC WEALTH & INVESTMENT

On 21 September 2023, the group completed its acquisition of 100% of the ordinary share capital of

Investec Wealth & Investment Limited (IW&I) from Investec Bank Plc. Investec Wealth & Investment

Limited owns 100% of the ordinary share capital in Investec Wealth & Investment (Channel Islands)

Limited and Murray Asset Management UK Limited. Results were consolidated with effect from 30

September 2023, as the effect of transactions and activities in the period from 21 September 2023 to

30 September 2023 on the consolidated financial statements was not material.

IW&I specialises in the provision of wealth and investment management services in the UK and

Channel Islands, catering to private clients, clients of professional advisers and charities. The group

expects to capture significant scale benefits from the combination, due to the consolidation of

technology platforms and operations, enablement functions, third party services and property, in

addition to utilising the benefits of the group’s banking licence once IW&I clients are migrated.

Consideration transferred

Total consideration transferred to Investec Bank Plc comprised a share issue of 27,056,463 ordinary

shares and 1748,48181,868 convertible non-voting ordinary shares. Based on Rathbones’ issued share

capital at completion, the total shares transferred to Investec Bank Plc amounted to an economic

interest in Rathbones Group Plc of 4121.25%, but in accordance with the terms of the acquisition 299.9%

of the total voting rights in Rathbones.

The fair value of the ordinary shares issued was determined with reference to the share price of

Rathbones Group Plc at close of business on 20 September 2023, and was assessed to be £1722 per .22 per

share. The fair value of the non-voting shares of £166.36 was calculated by applying a 5ng a 5.0% discount

to this share price, to reflect the fact the shares are non-marketable and non-transferable. This

produced a total value for consideration paid of £7519 mi.9 million.

As the share issue was in pursuance of the arrangement to acquire 100% of the shares in IW&I, the

premium on the share issue, being £7498 mi.8 million, qualifies for merger relief. This has been

recognised within the merger reserve.

The regulatory announcement for the acquisition on 4 April 2023 used a share price of £1884 to 8.84 to

derive an implied equity value of £839 million. However, the group’s share price has reduced since

the announcement, resulting in a lower value for the shares issued at the completion date of the

acquisition (21 September 2023).

The convertible non-voting ordinary shares rank pari-passu with the ordinary shares, except that

they do not carry voting rights. Investec Bank Plc may convert the convertible non-voting ordinary

shares into ordinary shares on a 1-for-1 basis, provided that at no time shall Investec group hold more

than 299.9% of the Rathbones group’s enlarged voting rights. Both the ordinary shares and convertible

non-voting ordinary shares qualify as common equity tier 1 capital of the Rathbones group.

Deferred Incentive awards

An ancillary matters agreement, which was signed at the time of the combination announcement in

April, includes detail of deferred awards and contingent payments to be made to a group of Investec

W&I employees under the Rathbones Integration Incentive Scheme. These payments require the

recipients of the awards to remain in employment with the group for the duration of the respective

deferral periods, and therefore these amounts have not been included in the acquisition accounting.

The cost for these equity-settled awards is being charged to profit or loss and spread over each

vesting period. Details of the share awards are as follows:

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8 BUSINESS COMBINATIONS CONTINUED

	Gross		Grant date
	amount		fair value
	£m	Grant date	£m	Vesting date
Rathbone Integration
Incentive Scheme	3939.0	6 October 2023	3131.2	22 September 2027

The Rathbone Integration Incentive Scheme awards of £390 mi.0 million is payable in shares, and will

vest in three equal tranches annually on the second, third and fourth anniversary of the completion

date, subject to conditions relating to the client migration process. Vesting of the final one-third of the

shares on the fourth anniversary of the date of grant will be subject to engagement in the client

migration process. The gross amount of £399.0 million represents management’s best estimate as to

the extent to which these conditions will be achieved. These awards are being accounted for as an

equity-settled share-based payment under IFRS 2. The grant date fair value was determined with

reference to the share price at grant less the value of expected dividends over the period to vesting, as

no dividend shares have been granted on this award. There are no market-related performance

conditions attached to this award.

The group recognised a charge of £3arge of £3.0 million in relation to this scheme in 2023 and all share options

are outstanding at the end of the period.

A Business Enablement award of £6.9 million was also granted during the year and is payable

predominantly in cash to different groups of employees in key business enablement functions. For

those recipients who are classified by the group as material risk-takers in accordance with

remuneration regulations, 50% of their award will be payable in shares. Approximately 30% of the

total award will vest on 31 March 2024, and the remainder will vest on 31 March 2025, subject to the

recipients remaining employed until this date and other conditions being met. The group treats the

cash element of the award as an employee benefit under IAS 19, with a corresponding liability

recognised for the services received at the balance sheet date, and the share element of the awards as

equity-settled share-based payments under IFRS 2.

The group recognised a charge of £18 m.8 million in relation to this scheme in 2023.

These costs are being reported as staff costs within acquisition-related costs (see note 9).

Identifiable assets acquired and liabilities assumed

The group uses the acquisition method to account for business combinations. The identifiable net

assets of the IW&I group have been remeasured at fair value at the acquisition date as follows:

	Carrying		Recognised
	amounts	Fair value	amounts
21 September 2023	£m	£m	£m
Settlement assets	233.3	–	233.3
Property, plant and equipment	5.0	–	5.0
Trade and other receivables	45.5	–	45.5
Loans and advances to customers	0.7	–	0.7
Software assets (note 22)	3.7	–	3.7
Client relationship intangible assets (note 22)	20.0	330.3	350.3
Cash and cash equivalents	172.6	–	172.6
Right-of-use assets	31.8	1.1	32.9
Settlement liabilities	(225.7)	–	(225.7)
Trade and other payables	(30.0)	–	(30.0)
Accruals and deferred income	(51.7)	–	(51.7)
Deferred tax liabilities (note 21)	4.6	(8 7.6)	(83.0)
Lease liabilities	(39.8)	8.7	(31.1)
Provisions	(10.7)	–	(10.7)
Total net assets acquired	159.3	252.5	411.8

The fair value of £3503 mi.3 million for the client relationship intangible assets has been measured using

a multi-period earnings method (note 22). The model uses estimates of client longevity and

investment performance to derive a series of cash flows, which are discounted to a present value to

determine the fair value of the client relationships acquired. These assets were valued separately by

client group, being direct private clients, corporates, intermediaries and charities, to reflect their

differing revenue margins and attrition rates. The average weighted life of the four groups has been

calculated at 14 years.

The deferred tax liability of £87.6 million arising on recognition of the client relationship intangible

assets is equal to its carrying value at the applicable tax rate and affects the amount of goodwill that

is recognised as part of the business combination.

No brand has been acquired as part of the transaction.

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170RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

8 BUSINESS COMBINATIONS CONTINUED

The group measured the acquired lease liabilities using the present value of the remaining lease

payments as if the leases were new leases at the acquisition date. The corresponding right-of-use

assets were measured at an amount equal to the lease liabilities, adjusted to reflect favourable or

unfavourable terms of the leases when compared to market terms. However, no off-market terms that

required an additional adjustment to the right-of-use assets were identified. Assumptions of when the

group expects to terminate these leases were reflected in the valuation.

A contingent liability assumed in a business combination is recognised at the acquisition date even if

an outflow of economic benefits is not probable, provided it is a present obligation arising from past

events and its fair value can be measured reliably. No contingent liabilities have been recognised at

acquisition. Circumstances which potentially exposed certain clients of IW&I to detriment arose in

the ordinary course of business prior to the date of acquisition. An estimate of the potential outflow

has been calculated at £1.1 million. A liability was not recognised at the year end, however all

economic outflows arising from this were indemnified by Investec Group at acquisition. The asset

relating to the amount receivable under the indemnity would be measured on the same basis as the

related liability and there would therefore be no impact on acquired goodwill.

Included within other creditors is £83 mi.3 million payable by Investec W&I to Investec Bank Plc in

relation to amounts recharged for the provision of payroll and other services.

Settlement balances and other receivables are current assets that are deemed to be collectible with no

allowance for doubtful debts required. Trade and settlement payables are generated through the

normal course of business and are classified as current liabilities expected to be settled through

payments in the short-term. The carrying value of these was therefore determined to approximate

fair value.

The fair value of all other net assets acquired were deemed to be equal to their carrying value.

Goodwill

Goodwill of £3401 mi.1 million arising on the excess of consideration over the fair value of the net assets

acquired represents the future economic benefit expected from an acquired workforce, expected

future growth and future client relationships, as well as operational and revenue synergies. Where

goodwill arises on consolidation within the group it is not deductible for tax purposes, and nor is any

impairment of goodwill in future periods.

	£m
Total consideration	751.9
Fair value of identifiable net assets acquired (see above)	411.8
Goodwill	340.1

If the group had made the acquisition on 1 January 2023, IW&I would have contributed £3588.4

million to group operating income and £858 m.8 million to profit before tax, as based on the company’s

results for the year to 31 December 2023.

SAUNDERSON HOUSE

On 20 October 2021, the group acquired 100% of the ordinary share capital of the Saunderson

HouseHouse group.

OTHER DEFERRED PAYMENTS

In addition to a total cash consideration of £989 mi.9 million paid in prior years, the sale and purchase

agreement details other deferred and contingent payments to be made to the vendors for the sale of

the shares of Saunderson House. However, these payments require the recipients to remain in

employment with the group for the duration of the respective deferral periods. Hence, they are being

treated as remuneration for post-combination services, and the cost is therefore charged to the

income statement over the respective vesting periods. Details of each of these elements is as follows:

	Gross		Grant date
	amount		fair value
	£m	Grant date	£m	Vesting date
Initial share consideration	55.2	20 October 2021	555.5	20 October 2024
Deferred share consideration	414.1	20 October 2021	414.1	20 October 2022
Management incentive scheme	555.5	20 December 2021	484.8	31 December 2024

All of these payments are to be made 100% in shares and are being accounted for as equity-settled

share-based payments under IFRS 2.

— Initial share consideration of £52 m.2 million was issued on the date of acquisition, however it does not

vest until the third anniversary of the acquisition date, subject to the vendors remaining employed

until this date. As the share issuance is in pursuance of the arrangement to acquire the shares of

the Saunderson House group, the premium of £52 m.2 million on the issuance of these shares has

been recognised within the merger reserve.

— Deferred share consideration of £44.1 million was settled in shares during the prior year on the first

anniversary of the acquisition date, and was subject to the vendors remaining in employment with

the group.

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171RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

8 BUSINESS COMBINATIONS CONTINUED

An incentive plan is in place for the Saunderson House senior management team, which is subject to

certain operational and financial performance targets. The consideration vests in the fourth year

following the acquisition date. The gross amount represents management’s best estimate as to the

extent to which these targets will be achieved. The award ranges from a minimum payment of £nil to

a cap of £75 mi.5 million (see note 23lion (see note 2.3).

These costs are being reported as staff costs within acquisition-related costs (see note 9).

9 ACQUISITIONQUISITION-RELATED AND INTEGRATION COSTS

During 2023£23 £443 mi44.3 million of acquisition-related and integration costs were incurred (2022: £135 3.5

million).

2023

		2022
	£m	£m
Acquisition of Speirs & Jeffrey	1.0	33.5
Acquisition of Investec Wealth & Investment	36.5	−
Acquisition of Saunderson House	6.8	1010.0
Acquisition-related and Integration costs	44.3	1313.5

Total Acquisition related staff costs worth £111.0 million (2022: 100 mi.0 million) during the year relate to

equity-settled share-based payments (Note 10).

COSTS RELATING TO THE ACQUISITION OF INVESTEC WEALTH & INVESTMENT

The group has incurred the following costs in relation to the acquisition of IW&I, summarised by the

following classification within the income statement:

	2023	2022
	£m	£m
Acquisition costs:
Staff costs (note 10)	6.2	−
Legal and Advisory Fees	21.3	−
Integration Costs	9.0	−
Acquisition-related and Integration costs	36.5	−

Non-staff acquisition costs (Leagal and Advisory fees) of £213 mi.3 million (2022: £nil) and integration

costs of £90 mi.0 million (2022: £nil) have not been allocated to a specific operating segment (note 3).

The Legal and advisory fees of £213 mi.3 million are one-off costs incurred on executing the transaction

(2022: £nil).

The group incurred costs of £22 mists of £2.2 million in the year that were deemed to be incremental to the share

issue that occurred on 21 September 2023. These costs have been recognised as a deduction to the

merger reserve.

From 30 September 2023 to 31 December 2023, Investec W&I contributed £87.9 million to the

group’s total operating income, and £150 mi.0 million to the group’s profit before tax. This excludes

integration costs of the acquired business since acquisition, and amortisation of the acquired client

relationship intangible assets.

COSTS RELATING TO THE ACQUISITION OF SPEIRS & JEFFREY

The group has incurred the following costs in relation to the 2018 acquisition of Speirs & Jeffrey,

summarised by the following classification within the income statement:

	2023	2022
	£m	£m
Acquisition costs:
Staff costs (note 10)	1.0	33.5
Acquisition-related and Integration costs	1.0	33.5

COSTS RELATING TO THE ACQUISITION OF SAUNDERSON HOUSE

The group has incurred the following costs in relation to the acquisition of Saunderson House,

summarised by the following classification within the income statement:

	2023	2022
	£m	£m
Acquisition costs:
Staff costs (note 10)	3.9	656.5
Legal and advisory fees	0.8	−
Integration costs	2.1	343.4
Acquisition-related and Integration costs	6.8	1010.0

Non-staff acquisition costs of £08 m.8 million (2022: £nil) and Integration costs of £2sts of £2.1 million (2022:

£3.4 million ) have not been allocated to a specific operating segment (note 3).

Staff costs of £3osts of £3.9 million (2022: 65 mi: 6.5 million) are related to deferred remuneration.

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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172RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

10 STAFF COSTS

	2023	2022
	£m	£m
Wages and salaries	244.3	1899.5
Social security costs	32.2	2525.2
Acquisition-related equity-settled share-based payments (note 9)	7.5	10.0
Acquisition-related cash-settled staff costs	3.5	−
Other equity-settled share-based payments	16.5	1595.9
Pension costs (note 29):
— Defined benefit schemes	(0.5)	(03)
— Defined contribution schemes	21.1	15315.3
	20.6	15015.0
Total staff costs	324.6	255655.6
Acquisition-related staff costs	(11.0)	(1010.0)
Underlying staff costs (note 3)	313.6	2456245.6

The average number of employees on a full-time equivalent basis during the year, incorporating IW&I

Ltd employees from the date of completion, was as follows:

		2023	2022
Wealth Management:
—	investment management services1	1,312	11,305
—	advisory services1	374	155
Asset Management		52	50
Shared services		760	543
		2,498	20532,053

1. A number of FTE in Saunderson House have been reclassified from investment management services to advisory services during

2023 as the integration has progresed

The actual number of Group employees at 31 December 2023 was 35as 3,532 (2022: 2: 2,124).

11 INCOME TAX EXPENSE

		2023	2022
		£m	£m
Current tax:
—	charge for the year	22.8	16.5
—	adjustments in respect of prior years	1.1	00.3
Deferred tax (note 21):
—	credit for the year	(1.9)	(13)
—	adjustments in respect of prior years	(1.9)	(04)
		20.1	15115.1

The tax charge is calculated based on our best estimate of the amount payable as at the balance sheet

date. Any subsequent differences between these estimates and the actual amounts paid are recorded

as adjustments in respect of prior years.

The tax charge on profit for the year is higher (2022: higher) than the standard rate of corporation tax

in the UK of 235.5% (2022: 190.0%). 233.5% is a composite tax rate, since the UK corporation tax rate

was 190.0% until the 31st March 2023 and 250% f.0% for the remainder of the financial year.

The differences are explained below:

		2023	2022
		£m	£m
Tax on profit from ordinary activities at the standard rate of 235.5%
(2022: 190: 19.0%)		13.6	12212.2
Effects of:
—	disallowable expenses	8.0	090.9
—	share-based payments	(0.2)	−
—	tax on overseas earnings	(0.7)	(02)
—	adjustments in respect of prior year	(0.8)	(010.1)
—	deferred payments to previous owners of acquired companies (note 9)	0.3	11.2
—	change in corporation tax rate on deferred tax	(0.1)	111.1
		20.1	15115.1

£00.4 million of current tax on share-based payments was charged to equity during the year (2022:

£0.1 million).

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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173RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

11 INCOME TAX EXPENSE CONTINUED

On 11 July 2023, the United Kingdom government, where the parent company is incorporated,

enacted the Pillar II income taxes legislation effective from 1 January 2024. Under the legislation,

thepthe parent company will be required to pay, in the United Kingdom, top-up tax on profits of its

subsidiaries located in territories outside the United Kingdom that are taxed at an effective tax rate of

less than 15%. The jurisdiction in which an exposure to this tax may exist is the Channel Islands. The

group is continuing to assess the impact of the Pillar II income taxes legislation on its future financial

performance following the Investec acquisition. Based on our initial evaluations, we do not expect

there to be a material additional Pillar II exposure for the group.

12 DIVIDENDS

		2023	2022
		£m	£m
Amounts recognised as distributions to equity holders in the year:
—	final dividend for the year ended 31 December 2022 of 562 of 56.0p (2021:	33.4	321.1
	5454.0p) per share
—	interim dividend for the year ended 31 December 2023 of 290p (20.0p (2022:	17. 5	16.6
	2828.0p) per share
—	second interim dividend for the year ended 31 December 2023 of	20.5	−
	3434.0p (202222:0p) per share
Dividends paid in the year of 1190p (.0p (2022: 820p.0p) per share		71.4	48.6
Proposed final dividend for the year ended 31 December 2023 of 24024.0p
(2022: 56056.0p) per share		24.9	32832.8

An interim dividend of 290p pe.0p per share was paid on 25 August 2023 to shareholders on the register at

the close of business on 4 August 2023 (2022: 28: 28.0p).

A second interim dividend of 34idend of 34.0 per share was paid on 11 October 2023 to shareholders on the

A final dividend declared of 24red of 24.0p per share (2022: 566.0p) is payable on 14 May 2024 to shareholders

on the register at the close of business on 19 April 2024. The final dividend is subject to approval by

shareholders at the Annual General Meeting on 9 May 2024 and has not been included as a liability in

these financial statements.

13 EARNINGS PER SHARE

Earnings used to calculate earnings per share on the bases reported in these financial

statementswts were:

		2023			2022
	Pre-tax	Taxation	Post-tax	Pre-tax	Taxation	Post-tax
	£m	£m	£m	£m	£m	£m
Underlying profit attributable to shareholders	127.1	(30.3)	96.8	9 77.1	(2040.4)	767.7
Charges in relation to client
relationships and goodwill
(note 22)	(25.2)	5.9	(19.3)	(195)	373.7	(155.8)
Acquisition-related costs
(note 9)	(44.3)	4.3	(40.0)	(1353.5)	161.6	(119.9)
Profit attributable to shareholders	57.6	(20.1)	37. 5	641.1	(15115.1)	49049.0

Basic earnings per share has been calculated by dividing profit attributable to shareholders by the

weighted average number of shares in issue throughout the year, excluding own shares, of

7126,269,129 (2022: 58: 58,61858,521). This includes 1748,481868 conver,868 convertible non-voting shares issued as

consideration for the IW&I transaction. In total, 445l, 44,538338,331 shares were issued as a result of the IW&I

transaction on 21 September. This has resulted in a mismatch between the weighted average number

of shares and the total number of shares of 10806508,06599,997 million disclosed in note 30 due to the

shares in the weighted average share calculation being prorated over from 21 September to year end.

Diluted earnings per share is the basic earnings per share, adjusted for the effect of contingently

issuable shares under the Saunderson House initial share consideration and Executive Incentive Plan,

employee share options remaining capable of exercise, expected shares to be issued under the KEEP

Support Function award, expected shares to be issued within the Rathbones Integration Incentive

Award Scheme and any dilutive shares to be issued under the Share Incentive Plan, all weighted for

the relevant period.

	2023	2022
Weighted average number of ordinary shares in issue during the year – basic	71,269,129	586158,618528,521
Effect of ordinary share options/Save As You Earn	443,865	5950595,055
Effect of dilutive shares issuable under the Share Incentive Plan	2,517	671
Effect of contingently issuable shares under the Executive Incentive Plan	294,770	5633,816
Effect of contingently issuable shares under Saunderson House initial share
consideration (note 8)	272,952	27292,952
Effect of expected shares to be issued under the Key Employee Equity Plan
Support Function Award	314,600	−
Effect of expected shares to be issued under the Rathbones Integration
Incentive Scheme Award	1,276,744	−
Diluted ordinary shares	73,874,577	6005160,05101,015

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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174RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

13 EARNINGS PER SHARE CONTINUED

		2023	2022
Earnings per share for the year attributable to equity holders of the
company:
—	basic	52.6p	8363.6p
—	diluted	50.8p	81681.6p
Underlying earnings per share for the year attributable to equity holders
of the company:
—	basic	135.8p	130130.8p
—	diluted	131.0p	12 77.7 p

Underlying earnings per share is calculated in the same way as earnings per share, but by reference to

underlying profit attributable to shareholders.

14 CASH AND BALANCES WITH CENTRAL BANKS

2023

		2022
	£m	£m
Balances with central banks	1,038.3	11,4133.0
Less impairment loss allowance	–	(010.1)
	1,038.3	141,412.9

The fair value of balances with central banks is not materially different from their carrying amount.

		2023	2022
		£m	£m
Repayable:
—	on demand	1,036.0	141,4080.0
—	within 1 year but over 3 months	2.3	505.0
Less impairment loss allowance		–	(010.1)
		1,038.3	141,412.9
Amounts include balances:
—	with variable interest rates	1,036.0	141,4080.0
—	which are non-interest-bearing	2.3	505.0
Less impairment loss allowance		–	(010.1)
		1,038.3	141,412.9

The group’s exposure to credit risk arising from cash and balances with central banks is described in

note 33.

15 LOANS AND ADVANCES TO BANKS

	2023	2022
	£m	£m
Current accounts	252.4	1647.7
Fixed term deposits/notice accounts	14.5	30030.0
Less impairment loss allowance	–	−
	266.9	1947.7

	2023	2022
	£m	£m
Repayable:
on demand	245.4	1647.7
within 3 months or less excluding on demand	21.5	−
within 1 year but over 3 months	–	3000.0
5 years or less but over 1 year	–	−
Less impairment loss allowance	–	−
	266.9	1947.7
Amounts include loans and advances:
with variable interest rates	256.8	19444.4
with fixed interest rates	9.9	−
which are non-interest-bearing	0.2	030.3
Less impairment loss allowance	–	−
	266.9	1947.7

The fair value of loans and advances is not materially different to their carrying amount. Fair value

has been calculated as the discounted amount of estimated future cash flows expected to be received

using current market rates.

Loans and advances to banks included in cash and cash equivalents at 31 December 2023 were

£26666.9 million (note 38) (2022: £16464.7 million).

The group’s exposure to credit risk arising from loans and advances to banks is described in note 33.

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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175RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

16 LOANS AND ADVANCES TO CUSTOMERS

	2023	2022
	£m	£m
Overdrafts	9.7	656.5
Investment management loan book	101.7	15979.7
Trust and financial planning debtors	2.9	323.2
Other debtors	1.6	050.5
Less impairment loss allowance	(0.3)	(010.1)
	115.6	169169.8

The fair value of loans and advances to customers is not materially different to their carrying amount.

Fair value has been calculated as the discounted amount of estimated future cash flows expected to

be received using current market rates. Debtors arising from the trust and financial planning

businesses are non-interest-bearing or subject to a fixed interest rate.

		2023	2022
		£m	£m
Repayable:
—	on demand	11.5	828.2
—	within 3 months or less excluding on demand	3.4	313.1
—	within 1 year but over 3 months	3.2	232.3
—	within 5 years but over 1 year	97. 8	1563.3
Less impairment loss allowance		(0.3)	(010.1)
		115.6	169169.8
Amounts include loans and advances:
—	with variable interest rates	111.3	166.0
—	which are non-interest-bearing	4.3	353.5
—	with fixed interest rates	0.3	040.4
Less impairment loss allowance		(0.3)	(010.1)
		115.6	169169.8

The group’s exposure to credit risk arising from loans and advances to customers is described in

note3note 33.

17 INVESTMENT SECURITIES

FAIR VALUE THROUGH PROFIT OR LOSS

		2023	2022
		£m	£m
Equity securities:
—	listed	–	818.1
—	unlisted	1.2	313.1
		1.2	1111.2

Fair value through profit or loss securities includes direct holdings in equity securities. The group

previously owned units in collectives managed by Rathbones Asset Management Limited (valued at

31 December 2022: £8.1 million). These assets were used to hedge the group’s exposure to deferred

remuneration schemes for employees of unit trusts. These assets were sold during the period. Equity

securities now comprise shares in Euroclear after units in Rathbones Asset Management Limited

managed funds were disposed of during the financial year. During the year, the group sold 129,292 of

its shares in Euroclear in two separate transactions. Equity securities do not bear interest.

AMORTISED COST

		2023	2022
		£m	£m
Debt securities:
—	unlisted	1,294.6	101,0455.2
Less impairment loss allowance		–	−
		1,294.6	101,0455.2

Debt securities comprise certificates of deposit that are all due to mature within one year (2022: all),

and treasury bills that are due to mature within one year (2022: all).

The fair value of debt securities is disclosed in note 33 .

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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176RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

17 INVESTMENT SECURITIES CONTINUED

The change in the group’s holdings of investment securities in the year is summarised below.

	Fair value through	Amortised
	profit or loss	cost	Total
	£m	£m	£m
At 1 January 2022	2999.9	76171.7	791791.6
Additions	252.5	121,2600.0	11,262.5
Disposals (sales and redemptions)	(2090.9)	(9835)	(10044.4)
Foreign exchange movements	00.2	77.0	77. 2
Gain from changes in fair value	(05)	−	(05)
Increase in impairment loss allowance	−	−	−
At 1 January 2023	11.2	1,045.2	1,056.4
Additions	–	2,059.9	2,059.9
Disposals (sales and redemptions)	(11.0)	(1, 80 7.1)	(1,818.1)
Foreign exchange movements	(3.2)	(3.4)	(6.6)
Gain from changes in fair value	4.2	–	4.2
Increase in impairment loss allowance	–	–	–
At 31 December 2023	1.2	1,294.6	1,295.8

Included within fair value through profit or loss are additions of £nil (2022£2:£25 mi.5 million) and £8ion) and £8.1

million (2022: £00.1 million) of disposals of financial instruments that are not classified as cash and

cash equivalents.

18 PREPAYMENTS, ACCRUED INCOME AND OTHER ASSETS

	2023	2022
	£m	£m
Work in progress	14.4	99.6
Prepayments and other assets	6.5	040.4
Other Assets	57.4	2414.1
Accrued income	147.0	9292.6
	225.3	1267126.7

Other assets include temporary client receivables, which are subject to daily movements as a result of

outstanding client transactions.

Work in progress reflects time and materials charged at year end but not invoiced to clients.

Accrued income reflects investment management fees, which are charged on a quarterly basis.

19 PROPERTY, PLANT AND EQUIPMENT

	Short term
	leasehold	Plant and
	improvements	equipment	Total
	£m	£m	£m
Cost
At 1 January 2022	2343.4	277. 2	5060.6
Additions	141.4	33.0	444.4
Disposals	(05)	(111.1)	(16)
At 1 January 2023	24.3	29.1	53.4
Additions	0.3	4.8	5.1
Acquisitions through business combinations
(note 8)	2.4	2.6	5.0
Disposals	–	(0.2)	(0.2)
Other Movements	0.8	(0.8)	–
At 31 December 2023	27. 8	35.5	63.3
Depreciation
At 1 January 2022	14.2	2333.3	377. 6
Charge for the year	202.0	282.8	47.7
Disposals	(04)	(12)	(16)
At 1 January 2023	15.8	24.9	40.7
Charge for the year	3.5	3.2	6.7
Disposals	–	(0.2)	(0.2)
At 31 December 2023	19.3	2 7.9	47. 3
Carrying amount at 31 December 2023	8.5	7.6	16.1
Carrying amount at 31 December 2022	858.5	424.2	127.7
Carrying amount at 1 January 2022	99.2	33.9	13113.1

During the year, where there was an expectation of the group vacating its properties prior to their

respective lease termination dates, the useful lives of any property, plant and equipment were

revised, and the assets were reviewed for impairment. The group subsequently recognised

accelerated depreciation in the year of £1.7 million.

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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177RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

20 RIGHT-OFUSE AOF-USE ASSETS

Property

		Motor
		vehicles and
		equipment	Total
	£m	£m	£m
Cost
At 1 January 2022	581.1	00.3	5848.4
Additions	373.7	−	37.7
Disposals	(08)	−	(08)
Other movements	(29)	−	(29)
At 1 January 2023	58.1	0.3	58.4
Additions	2.1	–	2.1
Acquisitions through business combinations (Note 8)	32.9	–	32.9
Disposals	(0.2)	–	(0.2)
Other movements	(2.9)	–	(2.9)
At 31 December 2023	90.1	0.3	90.4
Depreciation and impairment
1 January 2022	14.5	−	14.5
Charge for the year	55.5	01.1	55.6
Disposals	(08)	−	(08)
Other movements	−	−	−
At 1 January 2023	19.2	0.1	19.3
Charge for the year	7.4	0.1	7.5
Disposals	(0.9)	–	(0.9)
Other movements	–	–	–
At 31 December 2023	25.7	0.2	25.9
Carrying amount at 31 December 2023	64.4	0.1	64.5
Carrying amount at 31 December 2022	38938.9	00.2	3919.1
Carrying amount at 1 January 2022	4343.6	00.3	4393.9

During the year, where there was an expectation of the group vacating its properties prior to their

respective lease termination dates, the useful lives of the right-of-use assets were revised, and the

assets were reviewed for impairment. The group subsequently recognised impairment charges and

accelerated depreciation in the year of £2r of £2.9 million, which has been recognised in acquisition-related

costs (Note 9).

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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178RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUEDNOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

21 NET DEFERRED TAX ASSET/(LIABILITY)

The UK Government legislated in the Finance Act 2021 to increase the UK corporation tax rate to 255.0% from 190% on the 1st Apri.0% on the 1st April 2023. This has been reflected in the deferred tax calculations. Deferred

income taxes are calculated on all temporary differences under the liability method using the rate expected to apply when the relevant timing differences are forecast to unwind.

The group has applied the temporary exception, introduced in May 2023, from the accounting requirements for deferred taxes in IAS 12, so that the group neither recognises nor discloses information about

deferred tax assets and liabilities related to Pillar II income taxes.

The movement on the deferred tax account is as follows:

	Deferred				Fair value
	capital		Share-based	Staff-related	through	Intangible
	allowances	Pensions	payments	costs	profit or loss	assets	Total
	£m	£m	£m	£m	£m	£m	£m
As at 1 January 2023	4.0	(2.4)	12.1	9.2	(0.9)	(29.5)	( 7. 5)
Recognised in profit or loss in respect of:
current year	1.3	(0.8)	(2.5)	(0.5)	0.6	3.8	1.9
prior year	0.8	–	–	1.3	–	(0.2)	1.9
change in rate	0.1	(0.1)	–	–	–	–	–
Total	2.2	(0.9)	(2.5)	0.8	0.6	3.6	3.8
Recognised in other comprehensive income in respect of:
current year	–	1.4	–	–	–	–	1.4
prior year	–	–	–	–	–	–	–
change in rate	–	0.1	–	–	–	–	0.1
Total	–	1.5	–	–	–	–	1.5
Recognised in equity in respect of:
current year	–	–	(0.9)	0.1	–	–	(0.8)
prior year	–	–	–	–	–	–	–
change in rate	–	–	–	–	–	–	–
Total	–	–	(0.9)	0.1	–	–	(0.8)
Business combinations	1.3	–	–	3.3	–	(87.6)	(83.0)
Total	1.3	–	–	3.3	–	(87.6)	(83.0)
As at 31 December 2023	7.5	(1.8)	8.7	13.4	(0.3)	(113.5)	(86.0)
Deferred tax assets	7.5	–	8.7	13.4	–	–	29.6
Deferred tax liabilities	–	(1.8)	–	–	(0.3)	(113.5)	(115.6)
As at 31 December 2023	7.5	(1.8)	8.7	13.4	(0.3)	(113.5)	(86.0)

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179RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUEDNOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

21 NET DEFERRED TAX ASSET/(LIABILITY) CONTINUED

	Deferred				Fair value
	capital		Share-based	Staff-related	through	Intangible
	allowances	Pensions	payments	costs	profit or loss	assets	Total
	£m	£m	£m	£m	£m	£m	£m
As at 1 January 2022	383.8	(24)	979.7	77.3	(08)	(3131.4)	(138)
Recognised in profit or loss in respect of:	−	−	−	−	−	−	−
current year	−	(08)	090.9	00.2	01.1	191.9	232.3
prior year	020.2	−	01.1	010.1	−	−	040.4
change in rate	−	(26)	00.2	11.6	(02)	−	(10)
Total	020.2	(343.4)	11.2	191.9	(01.1)	11.9	17.7
Recognised in other comprehensive income in respect of:
current year	−	141.4	−	−	−	−	141.4
prior year	−	−	−	−	−	−	−
change in rate	−	202.0	−	−	−	−	202.0
Total	−	34.4	−	−	−	−	343.4
Recognised in equity in respect of:
current year	−	−	11.2	−	−	−	121.2
prior year	−	−	−	−	−	−	−
change in rate	−	−	−	−	−	−	−
Total	−	−	11.2	−	−	−	11.2
Business combinations	−	−	−	−	−	−	−
Total	−	−	−	−	−	−	−
As at 31 December 2022	404.0	(24)	121.1	929.2	(09)	(2929.5)	( 77. 5)
Deferred tax assets	404.0	−	1212.1	99.2	−	−	2525.3
Deferred tax liabilities	−	(24)	−	−	(09)	(2929.5)	(3232.8)
As at 31 December 2022	404.0	(24)	12112.1	99.2	(09)	(299.5)	(77. 5)

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180RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

22 INTANGIBLE ASSETS

Goodwill of £3401 mi.1 million was recognised as part of the acquisition of IW&I. (see note 8). This has

been provisionally allocated between the IW&I cash-generating unit (‘CGU’) and the Wealth

Management group of CGUs in the year, before being reviewed for impairment. This allocation will be

reviewed in 2024.

The group does not believe there are any key assumptions where reasonable changes could occur

which could give rise to a material adjustment in the carrying value.

Client relationships of £3500.3 million were recognised as part of the acquisition of IW&I (see note 8).

An average useful life of 14 years was assigned to these relationships, based on observed historic

attrition rates.

	2023	2022
	£m	£m
Goodwill	50 7.8	16 77.7
Other intangible assets	517. 5	188.5
	1,025.3	3562.2

GOODWILL

Goodwill acquired in a business combination is allocated, at acquisition, to the groups of cash-

generating units (CGUs) that are expected to benefit from that business combination.

The carrying amount of goodwill has been allocated as follows:

					Wealth
					Management	Investec W&I
					£m
	Wealth		Asset
	Management	Investec W&I	Management	Total
	£m	£m	£m	£m
Cost
At 1 January 2022	1677.7	−	191.9	1696.6
Acquired through business combinations (note 8)	−	−	−	−
At 1 January 2023	16 7.7	–	1.9	169.6
Acquired through business combinations (note 8)	82.1	258.0	–	340.1
At 31 December 2023	249.8	258.0	1.9	509.7
Impairment
At 1 January 2022	−	−	191.9	191.9
Charge for the year	–	–	–	–
At 31 December 2023	–	–	1.9	1.9

			Asset
			Management	Total
		£m	£m	£m
Carrying amount at 31 December 2023	249.8	258.0	–	507.8
Carrying amount at 31 December 2022	16 77.7	−	−	1677.7
Carrying amount at 1 January 2022	16 77.7	−	−	1677.7

IMPAIRMENT

The recoverable amounts of the groups of CGUs to which goodwill is allocated are assessed using

value-in-use calculations. The group prepares cash flow forecasts derived from the most recent

financial budgets approved by the board, which cover the three year period from the end of the

current financial year. This is extrapolated for five years based on recent historic annual revenue and

cost growth for each group of CGUs (see table below), adjusted for significant historic fluctuations in

industry growth rates where relevant, as well as the group’s expectation of future growth.

A five-year extrapolation period is chosen as this aligns with the period covered by the group’s

Internal Capital Adequacy Assessment Process (‘ICAAP’) modelling. A terminal growth rate is applied

to year five cash flows, which takes into account the net growth forecasts over the extrapolation

period and the long-term average growth rate for the industry. The group estimates discount rates

using pre-tax rates that reflect current market assessments of the time value of money and the risks

specific to the group of CGUs.

The pre-tax rate used to discount the forecast cash flows for each group of CGU is shown in the table

below; these are based on a risk-adjusted weighted average cost of capital. The group judges that these

discount rates appropriately reflect the markets in which each group of CGUs operate.

There was no impairment to the goodwill allocated to the Wealth Management group of CGUs or to

the Investec CGU during the period. The group has considered any reasonably foreseeable changes to

the assumptions used in the value-in-use calculation for the Wealth Management group of CGUs to

its cash flow projections and the level of risk associated with those cash flows. Based on this

assessment, no such change would result in an impairment of the goodwill allocated to this CGU.

	IW&I	Wealth management
At 31 December	2023	2023	2022
Discount rate	15.0%	14.1%	14.1%
Average annual revenue growth rate	4.0%	1.1%	43%4.3%
Average annual profit margin	26.8%	14.3%	2525.6%
Terminal growth rate	1.5%	1.5%	1.0%

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181RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

22 INTANGIBLE ASSETS CONTINUED

The increase in the terminal growth rate to 15.5% in 2023 is to align this with current expectations of

long-term UK economic growth. The fall in the average annual revenue growth rate since the prior

year primarily reflects the group's latest forecasts for the Saunderson House client migration by

operating segment, and lower levels of forecast commission income.

OTHER INTANGIBLE ASSETS

		Software
	Client	development	Purchased
	relationships	costs	software	Total
	£m	£m	£m	£m
Cost
At 1 January 2022	3026.6	117.7	531.1	3677.4
Internally developed in the year	−	11.8	−	11.8
Purchased in the year	101.0	−	11.8	282.8
Disposals	(27)	−	−	(27)
At 1 January 2023	300.9	13.5	54.9	369.3
Internally developed in the year	–	1.0	–	1.0
Acquired through business combinations (note 8)	350.3	1.7	2.0	354.0
Purchased in the year	2.6	–	2.2	4.8
Disposals	(2.8)	–	–	(2.8)
At 31 December 2023	651.0	16.2	59.1	726.3
Amortisation and impairment
At 1 January 2022	1099.0	858.5	4131.3	15888.8
Amortisation charge	1919.5	151.5	363.6	24624.6
Disposals	(26)	−	−	(26)
At 1 January 2023	125.9	10.0	44.9	180.8
Amortisation charge	25.2	1.8	3.8	30.8
Disposals	(2.8)	–	–	(2.8)
At 31 December 2023	148.3	11.8	48.7	208.8
Carrying amount at 31 December 2023	502.7	4.4	10.4	517. 5
Carrying amount at 31 December 2022	175.0	353.5	10.0	188.5
Carrying amount at 1 January 2022	193193.6	31.1	1111.8	2085208.5

Purchases of client relationships of £2ips of £2.6 million (2022: £1 million) in the year relate to payments

made to investment managers and third parties for the introduction of client relationships.

The total amount charged to profit or loss in the year in relation to goodwill and client relationship

intangible assets was £252 m.2 million (2022: £195 m.5 million).

Purchased software with a cost of £36.4 million (2022: £352 m.2 million) has been fully amortised but is

still in use.

23 DEPOSITS BY BANKS

On 31 December 2023, deposits by banks included overnight cash book overdraft balances of £122.4

million (2022: £1.0 million).

The fair value of deposits by banks was not materially different to their carrying value. Fair value has

been calculated as the discounted amount of estimated future cash flows expected to be paid using

current market rates.

24 DUE TO CUSTOMERS

		2023	2022
		£m	£m
Repayable:
—	on demand	1,652.3	232,3288.0
—	within 3 months or less excluding on demand	501.8	1832.2
—	within 1 year or less but over 3 months	99.2	494.9
		2,253.3	2,516.1
Amounts include balances:
—	with variable interest rates	1,618.6	2322,32444.4
—	with fixed interest rates	589.6	12 77.2
—	which are non-interest-bearing	45.1	6464.5
		2,253.3	2,516.1

The fair value of amounts due to customers was not materially different from their carrying value.

The estimated fair value of deposits with no stated maturity, which include non-interest-bearing

deposits, is the amount at which deposits could be transferred to a third party at the measurement

date. The estimated fair value of fixed-interest-bearing deposits is based on discounted cash flows

using interest rates for new debts with similar remaining maturity.

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182RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

DEFERRED, VARIABLE COSTS TO ACQUIRE CLIENT RELATIONSHIP INTANGIBLE ASSETS

Other movements in provisions relate to deferred payments to investment managers and third

parties for the introduction of client relationships, which have been previously capitalised.

LEGAL AND COMPENSATION

During the ordinary course of business the group may, from time to time, be subject to complaints, as

well as threatened and actual legal proceedings (which may include lawsuits brought on behalf of

clients or other third parties) both in the UK and overseas. Any such material matters are periodically

reassessed, with the assistance of external professional advisers where appropriate, to determine the

likelihood of the group incurring a liability. In those instances where it is concluded that it is more

likely than not that a payment will be made, a provision is established to the group’s best estimate of

the amount required to settle the obligation at the relevant balance sheet date. The group’s best

estimate is based on legal advice and management’s expectation of the most likely settlement

outcome, which in some cases is calculated by external professional advisers. The timing of

settlement of provisions for client compensation or litigation is dependent, in part, on the duration of

negotiations with third parties.

DEFERRED CONSIDERATION IN BUSINESS COMBINATIONS

Deferred Consideration in Business Combinations relates to Investec Wealth & Investment’s deferred

consideration provision on their acquisitions of Murray Asset Management and The Share Centre.

PROPERTYRELA-RELATED

Property-related provisions of £11.4 million relate to dilapidation provisions expected to arise on

leasehold premises held by the group (2022: £55.8 million). Dilapidation provisions are calculated

using a discounted cash flow model.

In 2023 the group did not utilise the property provision (2022: £nil). The impact of discounting led to

an additional charge of £00.2 million (2022: additional charge of £12 mi.2 million) being recognised during

the year.

Amounts payable after one year

Property-related provisions of £76 mi.6 million are expected to be settled within 11 years of the balance

sheet date, which corresponds to the longest lease for which a dilapidations provision is being held.

Remaining provisions payable after one year are expected to be settled within 13 years of the balance

sheet date.

ONEROUS CONTRACT

During the year, the group terminated a support agreement with a third-party service provider. The

onerous element of the contract represented a cost of £12 m.2 million to the group, which was recognised

as a provision at the year end.

25 ACCRUALS AND OTHER LIABILITIES

Note

		2023	2022
		£m	£m
Amounts due to associates	36	8.3	−
Trade creditors		8.2	33.2
Other creditors		24.4	10.2
Accruals		168.7	1009.9
		209.6	114.3

26 PROVISIONS

	Deferred,
	variable costs
	to acquire
	client	Deferred
	relationship	consideration
	intangible	in business	Legal and	Property-	Onerous
	assets	combinations	compensation	related	Contract	Total
	£m	£m	£m	£m	£m	£m
At 1 January 2022	868.6	−	212.1	464.6	−	15315.3
Charged to profit or loss	−	−	00.8	11.2	−	202.0
Unused amount credited to profit or loss	−	−	−	−	−	−
Net charge to profit or loss	−	−	00.8	121.2	−	20.0
Other movements	101.0	−	−	−	−	101.0
Utilised/paid during the year	(5.2)	−	(00.2)	−	−	(54)
At 1 January 2023	4.4	–	2.7	5.8	–	12.9
Charged to profit or loss	–	–	9.1	0.2	1.2	10.5
Unused amount credited to profitor lossit or loss	–	(0.1)	(1.1)	–	–	(1.2)
Net charge to profit or loss	–	(0.1)	8.0	0.2	1.2	9.3
Acquisitions through business
combinations (Note 8)	–	3.4	1.9	5.4	–	10.7
Other movements	2.6	–	–	–	–	2.6
Utilised/paid during the year	(2.3)	–	( 7.7 )	–	–	(10.0)
At 31 December 2023	4.7	3.3	4.9	11.4	1.2	25.5
Payable within 1 year	4.2	0.3	4.2	3.8	1.2	13.7
Payable after 1 year	0.5	3.0	0.7	7.6	–	11.8
	4.7	3 .3	4.9	11.4	1.2	25.5

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183RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

27 LEASE LIABILITIES

	2023	2022
Maturity analysis	£m	£m
Less than one year	11.9	55.0
One to five years	29.4	1969.6
More than five years	33.6	25925.9
Lease liabilities at 31 December	74.9	5050.5
Current	11.9	55.0
Non-current	63.0	4545.5
	74.9	5050.5

The total cash outflow for Group leases during the year was £10.7 million (2022: £85 mi8.5 million).

28 SUBORDINATED LOAN NOTES

		2023	2022
		£m	£m
Subordinated loan notes
—	face value	40.0	4040.0
—	carrying value	39.9	39939.9

Rathbones Group Plc holds £399 mi.9 million of 10-year tier 2 notes with a call option in October 2026 and

annually thereafter. The Issuer requires the group’s subsidiaries to comply with all laws and

governmental rules or regulations to which they are subject. Interest is payable at a fixed rate of

5642.642% per annum until the first call option date in 2026, and at a fixed rate of 489.893% over

Compounded Daily SONIA thereafter. Legal fees of £01 mi.1 million were incurred in issuing the notes,

which have been accounted for in the carrying value of amortised cost. An interest expense of £23 .3

million (2022: £23 mi.3 million) was recognised in the year.

29 LONGLONG-TERM EMPLOYEE BENEFITS

DEFINED CONTRIBUTION PENSION SCHEME

The group operates a defined contribution group personal pension scheme and contributes to various

other personal pension arrangements for certain directors and employees. The total contributions

made to these schemes during the year were £210 mi.0 million (2022: £152 m.2 million). The group also

operates a defined contribution scheme for overseas employees, for which the total contributions

were £0.1 million (2022: £0.1 million).

DEFINED BENEFIT PENSION SCHEMES

The group operates two defined benefit pension schemes that operate within the UK legal and

regulatory framework: the Rathbone 1987 Scheme and the Laurence Keen Retirement Benefit

Scheme. The schemes are currently both clients of Rathbones Investment Management, with

investments managed on a discretionary basis, in accordance with the statements of investment

principles agreed by the trustees. Scheme assets are held separately from those of the group.

The trustees of the schemes are required to act in the best interest of the schemes’ beneficiaries. The

appointment of trustees is determined by the schemes’ trust documentation and legislation. The

group has a policy that one third of all trustees should be nominated by members of the schemes.

The Laurence Keen Scheme was closed to new entrants and future accrual with effect from 30

September 1999. Past service benefits continue to be calculated by reference to final pensionable

salaries. From 1 October 1999, all the active members of the Laurence Keen Scheme were included

under the Rathbone 1987 Scheme for accrual of retirement benefits for further service. The Rathbone

1987 Scheme was closed to new entrants with effect from 31 March 2002 and to future accrual from

30 June 2017.

The schemes are valued by independent actuaries at least every three years using the projected unit

credit method, which looks at the value of benefits accruing over the years following the valuation

date based on projected salary to the date of termination of services, discounted to a present value

using a rate that reflects the characteristics of the liability. The valuations are updated at each balance

sheet date in between full valuations. The latest full actuarial valuations were carried out as at 31

December 2022.

In June 2023, the High Court handed down a judgement that casts doubt on the validity of previous

pension scheme amendments made by schemes which were previously contracted out. This was in

the Court Case of Virgin Media Limited Vs NTL Pension Trustees II Limited, where it was determined

that a Deed of Amendment was not valid because the accompanying written actuarial confirmation

under Section 37 of the Pensions Act 1995 was not present. An appeal to the ruling is due to be heard

this year. In the meantime, there remains a risk that the benefits of schemes affected by the ruling

turn out to be incorrect. The Rathbone 1987 Scheme was never contracted out and so is not impacted

by this ruling, however there could be a potential impact on the Lawrence Keen Scheme if any

amendments are found to be invalid. The impact is not known at this time but is not expected to be

material for the group based on information currently available to the Actuary, we will continue to

monitor.

The assumptions used by the actuaries, to estimate the schemes’ liabilities, are the best estimates

chosen from a range of possible actuarial assumptions. Due to the timescale covered by the liability,

these assumptions may not necessarily be borne out in practice.

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184RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

29 LONGTERM EMPLOYEE BENEFITS CONTINUED

The principal actuarial assumptions used, which reflect the different membership profiles of the

schemes, were:

	Laurence Keen Scheme		Rathbone 1987 Scheme
	2023	2022	2023	2022
	%	%	%	%
	(unless stated)	(unless stated)	(unless stated)	(unless stated)
Rate of increase of salaries	n/a	n/a	n/a	n/a
Rate of increase of pensions in payment	3.70	363.60	2.90	33.20
Rate of increase of deferred pensions	3.10	33.20	3.10	33.20
Discount rate	4.40	470.70	4.40	470.70
Inflation*	3.10	33.20	3.10	33.20
Percentage of members transferring
out of the schemes per annum	2.00	20.00	2.00	202.00
Average age of members at date of transferring out (years)	52.50	5252.50	52.50	5252.50

* Inflation assumptions are based on the Retail Prices Index

Over the year, the financial assumptions have been amended to reflect changes in market conditions.

Specifically:

1. the discount rate has decreased by 0ed by 0.3% to reflect a decrease in the yields available on AA-rated

Corporate Bonds;

2. the assumed rate of future inflation has decreased by 0.1% and reflects expectations of long-term

inflation as implied by changes in the Bank of England inflation yield curve;

3. the assumed rates of future increases to pensions in payment, where linked to inflation, have

decreased by 03.3% for the Rathbone 1987 Scheme and, for the Laurence Keen Scheme increased

by 0.1%

Over the year the mortality assumptions have been updated. The CMI model used to project future

improvements in mortality has been updated from the 2021 version to the 2022 version.

2% of members not yet in receipt of their pension are assumed to transfer out of the scheme each

year (2022: 2%).

The proportion of members assumed to be married at retirement age is 80% (2022: 80%)

The assumed duration of the liabilities for the Laurence Keen Scheme is 12 years (2022: 13 years) and

the assumed duration for the Rathbone 1987 Scheme is 16 years (2022: 16 years).

The normal retirement age for members of the Laurence Keen Scheme is 65 (60 for certain former

directors). The normal retirement age for members of the Rathbone 1987 Scheme is 60 for service

prior to 1 July 2009 and 65 thereafter, following the introduction of pension benefits based on

Career-Average Revalued Earnings (CARE) from that date. The assumed life expectancy for the

membership with improvements in line with the CMI 2022 tables with a long-term rate of

improvement of 15.5% p.a. The assumed life expectancies on retirement were:

		2023		2022
		Males	Females	Males	Females
Retiring today:	aged 60	27.6	29.5	2828.2	2999.9
	aged 65	22.8	24.5	2333.3	24924.9
Retiring in 20 years:	aged 60	29.4	31.2	2999.9	3131.6
	aged 65	24.3	26.1	249.9	26626.6

The amount included in the balance sheet arising from the group’s assets in respect of the schemes is

as follows:

		2023			2022
	Laurence	Rathbone		Laurence	Rathbone
	Keen	1987		Keen	1987
	Scheme	Scheme	Total	Scheme	Scheme	Total
	£m	£m	£m	£m	£m	£m
Present value of defined
benefit obligations	( 7.3)	(93.8)	(101.1)	( 77. 2)	(8 77.5 )	(947.7)
Fair value of scheme assets	8.2	99.9	108.1	81.1	9606.0	1041.1
Net defined benefit asset/
(liability)	0.9	6.1	7.0	090.9	858.5	949.4

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185RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

29 LONGTERM EMPLOYEE BENEFITS CONTINUED

The amounts recognised in profit or loss, within operating expenses, are as follows:

		2023			2022
	Laurence	Rathbone		Laurence	Rathbone
	Keen	1987		Keen	1987
	Scheme	Scheme	Total	Scheme	Scheme	Total
	£m	£m	£m	£m	£m	£m
Interest expense	(0.1)	(0.4)	(0.5)	(010.1)	(0.2)	(0.3)
	(0.1)	(0.4)	(0.5)	(010.1)	(0.2)	(0.3)

Remeasurements of the net defined benefit asset have been reported in other comprehensive

income. The actual return on scheme assets was a rise in value of £0.4 million (2022: £44.4 million

fall) for the Laurence Keen Scheme and a rise in value of £36 mi.6 million (2022: £588 mi8.8 million fall) for the

Rathbone 1987 Scheme.

Movements in the present value of defined benefit obligations were as follows:

			2023			2022
		Laurence	Rathbone		Laurence	Rathbone
		Keen	1987		Keen	1987
		Scheme	Scheme	Total	Scheme	Scheme	Total
		£m	£m	£m	£m	£m	£m
At 1 January		7. 2	8 7.5	94.7	11.2	144.4	1556155.6
Interest cost		0.3	4.1	4.4	020.2	27.7	29.9
Actuarial experience gains		0.1	3.4	3.5	010.1	33.6	373.7
Actuarial gains/(losses)
arising from:
—	demographic assumptions	(0.1)	(1.5)	(1.6)	−	010.1	010.1
—	financial assumptions	0.2	2.8	3.0	(36)	(5959.5)	(6313.1)
Past service cost		–	–	–	−	−	−
Benefits paid		(0.4)	(2.5)	(2.9)	(070.7)	(38)	(4.5)
At 31 December		7.3	93.8	101.1	77.2	877.5	947.7

Movements in the fair value of scheme assets were as follows:

			2023			2022
		Laurence	Rathbone		Laurence	Rathbone
		Keen	1987		Keen	1987
		Scheme	Scheme	Total	Scheme	Scheme	Total
		£m	£m	£m	£m	£m	£m
At 1 January		8.1	96.0	104.1	1313.0	15494.9	16 77.9
Remeasurement of net
defined benefit asset/
(liability)
—	interest income	0.4	4.5	4.9	030.3	292.9	33.2
—	return on scheme assets
	(excluding amounts
	included in interest
	income)	–	(0.8)	(0.8)	(4.6)	(618)	(6646.4)
Contributions from the sponsoring companies		0.1	2.8	2.9	010.1	33.8	393.9
Benefits paid		(0.4)	(2.6)	(3.0)	(07.7)	(38)	(4.5)
At 31 December		8.2	99.9	108.1	81.1	9606.0	1041.1

The Schemes' assets are fully invested with Legal & General Investment Management in Self-

Sufficiency Credit Funds and Absolute Return Bond Funds and no assets are invested in Rathbones

Funds. The Schemes invest in self-sufficiency strategies, which aim to fully hedge the interest and

inflation rate risk. The Trustees will review the asset allocation on a regular basis to ensure the

strategy remains appropriate.

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186RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

The key assumptions affecting the results of the valuation are the discount rate, future inflation,

mortality, the rate of members transferring out and the average age at the time of transferring out. In

order to demonstrate the sensitivity of the results to these assumptions, the actuary has recalculated

the defined benefit obligations for each scheme by varying each of these assumptions in isolation

whilst leaving the other assumptions unchanged. Changes to these assumptions of a different, but

similar, magnitude would result in a broadly proportional change in these figures. Where the changes

to these assumptions are more significant the impact will be more significant, but potentially not

proportional. These events within the sensitivity analysis are unlikely to occur in isolation. For

example, in order to demonstrate the sensitivity of the results to the discount rate, the actuary has

recalculated the defined benefit obligations for each scheme using a discount rate that is 0at is 0.5% higher

than that used for calculating the disclosed figures. A similar approach has been taken to

demonstrate the sensitivity of the results to the other key assumptions. A summary of the

sensitivities in respect of the total of the two schemes’ defined benefit obligations is set out below.

			Combined impact on schemes’ liabilities
		(Decrease)/	(Decrease)/
		increase	increase
		£m	%
05.5% increase in:
—	discount rate	( 77.7 )	( 77.6 )
05.5% increase in:
—	rate of inflation	444.4	444.4
1-year increase to:
—	longevity at 60	424.2	414.1

The total contributions made by the group to the 1987 Scheme during the year were £28 m.8 million

(2022: £38 mil3.8 million).

There have been contributions of £02 mi0.2 million (2022: £02 mi0.2 million) made by the group to the

Laurence Keen Scheme during the year.

Contributions for the year are in line with those agreed as part of the actuarial valuation as at 31

December 2023.

Per IAS 19, companies are required to limit the value of any defined benefit asset to the lower of the

surplus in the plan and the defined benefit asset ceiling, where the asset ceiling is the present value

of economic benefits available in the form of refunds from the plan or reductions in future

contributions to the plan. The company expects to access any surplus assets remaining in the plan

once all members have left after gradual settlement of the liabilities. Therefore, the net asset is

deemed to be recoverable and the effect of the asset ceiling is £nil.

29 LONGTERM EMPLOYEE BENEFITS CONTINUED

The analysis of the scheme assets, measured at bid prices, at the balance sheet date was as follows:

				2023	2022
		2023	2022	Current	Current
		Fair value	Fair value	allocation	allocation
Laurence Keen Scheme		£m	£m	%	%
Equity instruments:
—	United Kingdom	–	020.2	–	−
—	Eurozone	–	020.2	–	−
—	North America	–	07.7	–	−
—	Other	–	050.5	–	−
		–	11.6	–	19
Debt instruments:
—	United Kingdom corporate bonds	0.4	44.3	–	−
		0.4	44.3	5	54
Liability-driven investments		7.8	20.0	93	25
Cash		0.1	010.1	2	1
Other		–	010.1	–	1
At 31 December		8.3	81.1	100	100

				2023	2022
		2023	2022	Current	Current
		Fair value	Fair value	allocation	allocation
Rathbone 1987 Scheme		£m	£m	%	%
Equity instruments:
—	United Kingdom	–	424.2	–	−
—	Eurozone	–	252.5	–	−
—	North America	–	13513.5	–	−
—	Other	–	61.1	–	−
		–	26326.3	–	28
Debt instruments:
—	United Kingdom corporate bonds	–	377.7	–	−
		–	377.7	–	39
Liability-driven investments		98.4	3030.8	99	32
Cash		1.5	11.2	1	1
Other		–	−	–	−
At 31 December		99.9	96096.0	100	100

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187RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

30 SHARE CAPITAL, SHARE PREMIUM AND MERGER RESERVE

The following movements in share capital occurred during the year:

			Share Capital	Share Capital	Exercise/	Share	Share	Merger
			– Voting	– Non-voting	issue price	capital	premium	reserve	Total
			shares	shares	Pence	£m	£m	£m	£m
At 1 January 2022			6200334162,003,341	−	−	313.1	29191.0	7 77.0	37111.1
Shares issued:
—	to Share Incentive Plan		4 677, 559	−	161,60000.0 - 20 2,09000.0	−	99.2	−	99.2
—	to Save As You Earn scheme		11811,181	−	101,0855.0 - 1 1,8130.0	−	−	−	−
—	to Employee Benefit Trust		48181,500	−	505.0	−	−	−	−
—	to Business Combinations		4411,256	−	19,9134 - 2.4 - 2,4844.0	01.1	97.7	−	99.8
At 1 January 2023			63,394,837	–	–	3.2	310.0	7 7.0	390.1
Shares issued:
—	to Share Incentive Plan		132,829	–	1,574.0 - 2,160.0	–	2.3	–	2.3
—	to Save As You Earn scheme		–	–	–	–	–	–	–
—	to Employee Benefit Trust		–	–	–	–	–	–	–
—	to Business Combinations	27,056,	46 3	17,481,868	1,635.9 - 1,722.0	2.2	–	747.4	749.6
At 31 December 2023			90,584,129	17,481,868	–	5.4	312.3	824.4	1,142.0

The total number of issued and fully paid up ordinary shares at 31 December 2023 was 10808,06599,997

(2022: 633,394837) wit,837) with a par value of 5p per share.

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are

entitled to one vote per share at meetings of the company. The ordinary shareholders are entitled to

any residual assets on the winding up of the company.

The convertible non-voting shares rank pari passu with the ordinary shares, except that they do not

carry voting rights. Both the ordinary shares and convertible non-voting shares qualify as common

equity tier 1 capital.

On 30 March 2022, the company issued 229,489 shares in respect of the Speirs & Jeffrey second

earn-out consideration relating to the 2021 incentivisation award.

On 26 October 2022, the company issued 211,767 shares in respect of the Saunderson House

deferred consideration award.

On 21 September 2023, the company issued to Investec Bank Plc 270,05656,463 of ordinary shares at

£1722 pe.22 per share, and 17,481868 of convert,868 of convertible non-voting ordinary shares at £1636.36 per share.

Share issue costs of £22 m.2 million were offset against the merger reserve. See notes 8 and 9 for

furtherdetaher detail.

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31 OWN SHARES

The following movements in own shares occurred during the year:

	Number of
	Shares	£m
At 1 January 2022	3,624,714	36636.6
Additions in the year	141,4400,695	187.7
Released on vesting	(17878,115)	(27)
At 1 January 2023	4, 8 87, 294	52.5
Additions in the year	931,153	16.0
Released on vesting	(1,374,930)	(13.0)
At 31 December 2023	4,443,517	55.6

Own shares represent the cost of the company’s own shares, either purchased in the market or issued

by the company, that are held by the company or in an Employee Benefit Trust (‘EBT’) to satisfy future

awards under the group’s share-based payment schemes (note 32). A total of 32l of 3,27559,598 shares were

held in the EBT at 31 December 2023 (2022: 3: 3,786,182), and 894), and 894,966 shares were held by the trustees

of the Share Incentive Plan but were not unconditionally gifted to employees (2022: 82828,160).

A further 2722,952 (2022: 2729,952) of shares were held in nominee in respect of the initial share

consideration for the acquisition of Saunderson House.

32 SHAREBASESHARE-BASED PAYMENTS

The group recognised total charges of £240 mi.0 million in relation to share-based payment transactions

in 2023 (2022: £259 mil.9 million) (see note 10). This includes acquisition-related share-based payments

(see note below), and excludes social security costs of £1.7 million (2022: £11.1 million).

The impact on retained earnings of employee remuneration and share plans vesting in the year,

where shares were not released from the group employee benefit trust, was a debit of £60 mi6.0 million

(2022: debit of £128 mi12.8 million). This includes £nil for share schemes where no cash consideration was

received (2022: debit of £98 m.8 million). See note 38.

SHARE INCENTIVE PLAN

The group operates a Share Incentive Plan (SIP), which is available to all employees. Employees can

contribute up to £150 per month to acquire partnership shares in Rathbones Group Plc, which are

purchased or allotted in monthly accumulation periods. The group currently matches employee

contributions on a one-for-one basis to acquire matching shares.

The group also provides performance-related free shares, with eligible employees receiving shares

valued at the rate of £100 per 1% real increase in earnings per share up to a maximum of £3600 ,600

peraper annum.

For UK employees, SIP dividends are reinvested and used to purchase dividend shares, whilst for

Jersey employees dividends are paid in cash.

Fair value assumptions required by IFRS 2 are used to calculate the relevant fair values for this

award. The assumptions have been set with reference to market conditions at the grant date. The fair

value of free shares has been calculated as the value of an option with a zero exercise price and

exercise date 15 months from the date of grant. Once free share awards are allocated, they accrue

dividends, which become payable once the awards vest. The dividend yield has been calculated

based on the share price at grant and 12 months’ historical dividends at each grant date, resulting in a

dividend yield of 40% per a.0% per annum.

As at 31 December 2023, the trustees of the SIP held 1,773,475 (2022: 16,63434,429) ordinary shares of

5p each in Rathbones Group Plc with a total market value of £309 mi.9 million (2022: £333 m.3 million). Of

the total number of shares held by the trustees, 11,14646,166 (2022: 1,101,112) have been conditionally

gifted to employees and Nil (2022: 2: 2,055) remain unallocated.

The group recognised a charge of £25 miarge of £2.5 million in relation to this scheme in 2023 (2022: £2: £2.4 million).

SAVINGSRES-RELATED SHARE OPTION OR SAVE AS YOU EARN (SAYE) PLAN

Under the SAYE plan, employees can contribute up to £500 per month to acquire shares at the end of

a three- or five-year savings period.

Options with an aggregate estimated fair value of £22 mialue of £2.2 million, determined using a binomial

valuation model including expected dividends, were granted on 28 April 2023 to directors and staff

under the SAYE plan. The inputs into the binomial model for options granted during 2023, as at the

date of issue, were as follows:

	2023	2022
Share price (pence)	1,954	212,125
Exercise price (pence)	1,524	11,394
Expected volatility	28.0%	26%
Risk-free rate	3.8%	17%1.7%
Expected dividend yield	4.3%	33.5%

The number of share options outstanding for the SAYE plan at the end of the year, the period in

which they were granted and the dates on which they may be exercised are given below.

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32 SHAREBASED PAYMENTS CONTINUED

			2023	2022
	Exercise price	Exercise price	Number of	Number of
Year of grant	Pence	period	share options	share options
2018	1,9777. 0	2021 and 2023	60	5635,634
2019	11,8133.0	2022 and 2024	4,260	44184,418
2020	101,0855.0	2023 and 2025	520,303	11,06161,217
2021	11,3655.0	2024 and 2026	169,879	1800,570
2022	11,394.0	2025 and 2027	320,801	345645345,645
2023	152401,524.0	2026 and 2028	388,343	−
At 31 December			1,403,646	15,597,484

Movements in the number of share options outstanding for the SAYE plan were as follows:

		2023	2022
		Weighted average		Weighted average
	Number of	exercise price	Number of	exercise price
	share options	Pence	share options	Pence
At 1 January	1,597,484	1,272.0	136385,363,852	1151,1522.0
Granted in the year	418,512	1,365.0	3646504,650	131,3655.0
Forfeited or cancelled in the year	(89,609)	1,403.0	(8888,406)	11,2720.0
Exercised in the year	(522,741)	1,086.0	(42,612)	11,5880.0
At 31 December	1,403,646	1,266.0	15,597,484	11,272.0

The fair value assumptions for each SAYE award granted are set with reference to market conditions

at the grant date. Factors affecting the fair value of the award are the volatility of the share return,

dividend policy, expected leaving service rates and early exercise.

In setting the assumption for future share return volatility, historical volatility is calculated, using the

Group’s historical share price and calculating the return on a weekly basis. The historical annualised

volatility of the Group’s share return is then measured over rolling one, three and five periods.

ThemoThe most appropriate historical volatility measure, based on weekly share price data, is then used for

the purposes of setting the volatility assumption for both awards. Consistent with previous practice,

a5-year ha 5-year historical volatility measure was used, creating a volatility assumption of 28% per annum

(2022: 26% per annum).

The weighted average share price at the dates of exercise for share options exercised during the year

was £1086 (2.86 (2022: £1588.88). The options outstanding at 31 December 2023 had a weighted average

contractual life of 2fe of 2.6 years (2.4 years) and a weighted average exercise price of £131.13 (2022: £1189.89).

The group recognised a charge of £18 m.8 million in relation to this scheme in 2023 (2022: £16 mi.6 million).

EXECUTIVE INCENTIVE PLAN

Under the remuneration policy, 40% of the total award will be given in cash with the remaining 60%

of the award granted in shares. The group treats the cash element of the award as an employee benefit

under IAS 19 and the share element of the award as an equity-settled share-based payment under

IFRS 2. The fair value has been determined with reference to the share price at grant.

In 2021 this award was replaced with the Executive Share Performance Plan.

The group recognised a charge of £06 mi.6 million in relation to the equity-settled share-based payment

element of this scheme in 2023 (2022: £2: £2.0 million).

The number of outstanding options left to vest for the EIP scheme as at 31 December 2023 is 200s 200,725.

EXECUTIVE SHARE PERFORMANCE PLAN

The scheme was launched in 2021 to replace the Executive Incentive Plan.

Details of the general terms of this plan are set out in the remuneration committee report on page 129.

Under the remuneration policy, 50% of the annual bonus award is paid in cash and 50% is deferred in

shares, although this split can be altered subject to Remuneration Committee approval. An annual

restricted stock plan award is also granted under the scheme, and payment is deferred in shares.

The group treats the cash element of the award as an employee benefit under IAS 19 and the share

element of the awards as equity-settled share-based payments under IFRS 2. The fair value has been

determined with reference to the share price at grant.

The group recognised a charge of £3arge of £3.3 million in relation to the equity-settled share-based payment

element of this scheme in 2023 (2022: £2: £2.0 million).

The number of outstanding options left to vest for the ESPP scheme as at 31 December 2023 is 35323,292.

STAFF EQUITY PLAN

The Key Staff Equity Plan (‘KSEP’) was for individuals within Rathbones Investment Management

and Rathbones Investment Management International. In anticipation of the KSEP vesting during

2023, the Key Employee Equity Plan (‘KEEP’) was launched in 2022 for individuals within Rathbones

Investment Management and Rathbones Investment Management International, as well as

employees within the group’s support functions. The aim of the schemes is to promote increased

equity interest in Rathbones Group Plc amongst employees.

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32 SHAREBASED PAYMENTS CONTINUED

Under both schemes, participants were granted awards under the plan in the form of an option with

an exercise price of £nil. The option awards are subject to certain service and performance

conditions. There are no market-related performance conditions attached to these awards.

The KSEP awards vested during the year on the fifth anniversary of the grant date. The awards are

exercisable from the vesting date until the tenth anniversary of the grant date. The fair value has

been determined with reference to the share price at grant less the value of expected dividends over

the period to vesting, as no dividend shares have been granted on this award.

The KEEP awards will vest and become exercisable on the fifth anniversary of the grant date for

thefthe front office employees, and on the third anniversary of the grant date for employees in support

functions. The fair value has been determined with reference to the share price at grant. There are

nomano market-related performance conditions attached to this award.

The group recognised a charge of £2arge of £2.1 million for the KSEP award in the year (2022: £42 mi4.2 million),

and a charge of £2arge of £2.7 million for the KEEP award (2022: £00.9 million).

The number of outstanding options left to vest for the KEEP scheme as at 31 December 2023

is962is 962,100.

OTHER SCHEMES

The group operates a number of other plans for rewarding employees. Participants are granted

awards under these plans in the form of options, which vest automatically on an anniversary of the

grant date (generally between one and five years). As the intention is to settle the options in such

plans in shares, the awards are treated as equity-settled share-based payments under IFRS 2.

The Group recognised a charge of £13 mi.3 million for the Rathbones Exceptional Performance Plan

scheme in 2023 (2022: 1.7 million).

The Group recognised a charge of £23 m.3 million for the Rathbone Enhanced Profit Share Plan scheme

in 2023 (2022: 2.1 million).

ACQUISITIONRELACQUISITION-RELATED SHAREBASETED SHARE-BASED PAYMENTS

Details of the general terms of share-based payments associated with the acquisition of Speirs &

Jeffrey, Saunderson House and IW&I are set out in note 8.

33 FINANCIAL RISK MANAGEMENT

The group has identified the financial, business and operational risks arising from its activities and

has established policies and procedures to manage these items in accordance with its risk appetite,

asdeas described in the group risk committee report on pages 110 to 113.

The group categorises its financial risks into the following primary areas:

(i) credit risk (which includes counterparty default risk)

(ii) liquidity risk;

(iii) market risk (which includes fair value interest rate risk, cash flow interest rate risk, foreign

exchange risk and price risk); and

(iv) pension risk.

The group’s exposures to pension risk are set out in note 29.

The group’s financial risk management policies are designed to identify and analyse the financial

risks that the group faces, to set appropriate risk tolerances, limits and controls, and to monitor the

financial risks and adherence to limits by means of reliable and up-to-date information systems.

ThegThe group regularly reviews its financial risk management policies and systems to reflect changes

intin the business, counterparties, markets and the range of financial instruments that it utilises.

The treasury department, reporting through the banking committee, has principal responsibility for

monitoring exposure to credit risk, liquidity risk and market risk. Procedures and delegated

authorities are documented in a group treasury manual and policy documents prescribe the

management and monitoring of each type of risk. The primary objective of the group’s treasury

policy is to manage short term liquidity requirements whilst maintaining an appropriate level of

exposure to other financial risks in accordance with the group’s risk appetite.

(i) CREDIT RISK

The group takes on exposure to credit risk, which is the risk that a counterparty will be unable to

payapay amounts in full when due, through its banking, treasury, trust and financial planning activities.

TheprThe principal source of credit risk arises from placing funds in the money market and holding

interest-bearing securities. The group also has exposure to credit risk through its client loan book.

It is the group’s policy to place funds generated internally and from deposits by clients with a range

ofhof high-quality, investment grade financial institutions and the Bank of England. Investments with

financial institutions are spread to avoid excessive exposure to any individual counterparty. Loans

made to clients are secured against clients’ assets that are held and managed by group companies.

Exposure to credit risk is managed through setting appropriate ratings requirements and lending

limits. Limits are reviewed regularly, taking into account the ability of borrowers and potential

borrowers to meet repayment obligations.

The group categorises its exposures based on the long-term ratings awarded to counterparties by

Fitch, Moody’s or S&P. Each exposure is assessed individually, both at inception and in ongoing

monitoring. In addition to formal external ratings, the banking committee also utilises market

intelligence information to assist with its ongoing monitoring. The group’s financial assets are

categorised as follows:

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(b) Investment management loan book

Loans are provided as a service to investment management clients, who are generally asset-rich

but have short- to medium-term cash requirements. Such loans are normally made on a fully

secured basis against portfolios held in Rathbones’ nominee name, and some loans may be

partially secured by property. Extensions to the initial loan period may be granted subject to

credit criteria.

All lending exposures undergo an initial assessment of creditworthiness according to Rathbones’

internal affordability model. On an ongoing basis, the assessment is repeated at least annually,

orsooneor sooner in the event of a trigger, such as a decline in portfolio value due to withdrawal or

market conditions, as this would highlight a potential deterioration in creditworthiness.

At 31 December 2023, the total lending exposure limit for the investment management loan

book was £2500 m.0 million (2022: 2500 mi.0 million), of which £1002 mi00.2 million had been advanced

(2022: £158158.1 million) and a further £154 mi.4 million had been committed (2022: £222.5 million).

Trust and financial planning debtors relate to fees which have been invoiced but not yet settled

by clients. The collection and ageing of trust and financial planning debtors are reviewed on a

monthly basis by the management committees of the group’s trust and financial planning

businesses.

(d) Other debtors

Other loans and advances to customers relate to management fees receivable.

Settlement balances

Settlement risk arises in any situation where a payment in cash or transfer of a security is made in the

expectation of a corresponding delivery of a security or receipt of cash. The majority of transactions

are carried out on a delivery versus payment basis, which results in securities and cash being

exchanged within a very close timeframe. Settlement balances outside standard terms are monitored

on a daily basis.

The Wealth Management and Asset Management segments have exposure to market counterparties

in the settlement of trades. Settlement balances arising in the Investment Management segment are

primarily in relation to client trades and risk of non-settlement is borne by clients.

33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

Balances with central banks (note 14)

The group has exposure to central banks through its deposits held with the Bank of England.

Loans and advances to banks (note 15) and debt and other securities (note 17)

The group has exposures to a wide range of financial institutions through its treasury portfolio,

which includes bank deposits, certificates of deposit, money market funds and UK Government

treasury bills. These exposures principally arise from the placement of clients’ cash, where it is held

under a banking relationship, and the group’s own reserves.

Balances with central banks, loans and advances to banks and debt and other securities (excluding

equity securities) are collectively referred to as the group’s treasury book.

	2023	2022
Treasury book	£m	£m
Balances with central banks	1,038.3	11,4133.0
Loans and advances to banks − fixed deposits/notice accounts	14.5	30030.0
Unlisted debt securities	1,294.6	101,0455.2
Gross amount	2, 347. 4	242,488.2

The group’s policy requires that all such exposures are only taken with counterparties that have been

awarded a minimum long-term rating of single A by Fitch or equivalent rating by Moody’s or S&P.

Counterparty limits are also in place to limit exposure to an individual counterparty or connected

group of counterparties. Counterparty exposures are monitored on a daily basis by the treasury

department and reviewed by the banking committee on a monthly basis, or more frequently when

necessary. The banking committee may suspend dealing in a particular counterparty, or liquidate

specific holdings, in the light of adverse market information.

Loans and advances to customers (note 16)

The group provides loans to clients through its investment management operations (‘the investment

management loan book’). The group is also exposed to credit risk on overdrafts on clients’ investment

management accounts, work in progress arising from the trust, tax and financial planning businesses

(‘trust and financial planning debtors’) and other debtors.

(a) Overdrafts

Overdrafts on clients’ investment management accounts arise from time to time due to short-

term timing differences between the purchase and sale of assets on a client’s behalf. Overdrafts

are actively monitored and reported to the banking committee on a monthly basis.

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Expected Credit Loss (‘ECL’) assessment

At each reporting date, for both the treasury book and investment management loan book, the group

assesses whether there has been a significant increase in credit risk of exposures since initial

recognition, by comparing the change in the risk of a default occurring over the expected life of the

instrument between the reporting date and the date of initial recognition. The following criteria are

used to identify significant increases in credit risk and are monitored and reviewed periodically for

appropriateness by the treasury team.

The group’s ECL model was calibrated during a time of benign inflation, and thus inflation was

historically negatively correlated with PDs. Given current inflation is supply-driven, a post-model

adjustment was made to flatten the inflation forecast to remove the dampening effect on the PD.

Qualitative indicators

The group periodically monitors its exposures and uses a set of defined criteria to flag any

counterparties that may be experiencing financial difficulties. Such exposures are monitored by the

treasury team, and those that are considered to have experienced a significant increase in credit risk

are classified as ‘stage 2’, on which a lifetime ECL is recognised.

Quantitative indicators

The lifetime probability of default at the reporting date is compared to the original lifetime

probability of default at initial recognition and if the difference exceeds a predefined threshold

(forthe cu(for the current analysis this threshold is set at 50% of the value at initial recognition) the exposure

ismoved to stais moved to stage 2.

Probability of defaults used for identifying significant increases in credit risk for staging purposes are

calculated using the same methodology and data used for estimating probability of defaults for the

purpose of measuring expected credit losses.

The ‘30 days past due’ backstop indicator has not been rebutted by the group, albeit it is not a

significant driver of stage movements as the opportunity for a counterparty to miss a payment is low

due to the fact that over the life of exposure, any interest and/or principal is directly debited from the

counterparty’s investment balance and investment income, which is in turn held as collateral under

the group’s custody.

Materially all exposures in both the treasury book and investment management loan book follow a

bullet repayment structure; therefore, the exposure at any point in time reflects the outstanding

balance of the instrument at that point in time.

Definition of default

The group considers an investment management loan book exposure to be in default when a client

fails to respond to three sets of default notices (every 30 days for a period of 90 days). A treasury book

exposure is deemed to be in default when a payment is past due by more than one working day

(gracepgrace period).

33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

Maximum exposure to credit risk

		2023	2022
		£m	£m
Credit risk relating to on-balance-sheet exposures:
Cash and balances with central banks		1,038.3	11,4133.0
Settlement balances		165.7	6565.8
Loans and advances to banks		266.9	1947.7
Loans and advances to customers:
—	overdrafts	9.7	66.5
—	investment management loan book	101.7	15979.7
—	trust and financial planning debtors	2.7	303.0
—	other debtors	1.6	050.5
Investment securities:
—	unlisted debt securities and money market funds	1,294.6	101,0455.2
Other financial assets		191.3	1047.7
Credit risk relating to off-balance-sheet exposures:
Loan commitments		15.4	22522.5
		3,087.9	33,0157.7

The above table represents the group’s gross credit risk exposure at 31 December 2023 and 2022,

without taking account of any associated collateral held or other credit enhancements. For on-

balance-sheet assets, the exposures set out above are based on gross carrying amounts.

Of the total maximum exposure, 1424.2% is derived from loans and advances to banks and customers

(2022: 122.1%) and 41.1% represents investment securities (2022: 34.7%).

Impairment of financial instruments

The group’s accounting policy governing impairment of financial assets is given in note 1.12.

Impairment losses on financial assets recognised in profit or loss were as shown in the table below.

The main class of asset these impairment losses have arisen against is cash and balances held with

central banks.

		2023	2022
		£m	£m
Impairment losses/(reversals) arising from:
—	treasury book	–	−
—	investment management loan book	–	−
—	trust and financial planning debtors	0.1	(01)
		0.1	(01)

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

Probability of default (PD)

The group uses a lifetime PD for each exposure, which is the probability-weighted result of

considering three economic scenarios: a base case, an upside scenario and a downside scenario.

These scenarios include the forecast of the macroeconomic factors that have been identified as

relevant to the group’s exposures, which are incorporated into the estimation of lifetime PDs.

The methodology for estimating lifetime PDs and adjustments for macroeconomic scenarios used for

identifying significant increases in credit risk are as follows:

Treasury book assessment

The 12-month PD for each exposure is initially estimated as the historical 12-month PD sourced from

Standard & Poor’s, by credit rating and country of exposure. In order to estimate the PDs occurring

over the lifetime of an underlying exposure, the group applies its expectations of future progression

in point in time (‘PiT’) default probabilities, which inherently revolve around expectations of future

development of macroeconomic factors relevant to treasury assets, namely UK GDP, UK

unemployment rates, UK inflation and UK interest rates.

Loss given default (LGD) for treasury book assets is dependent on the nature of the counterparty and

the region in which the instrument was issued. For sovereign exposures, the group applies a flat LGD

rate, which is externally sourced from Moody’s most recent sovereign default and recovery rates

research statistics, by country of issuer. For unsecured corporate exposures, a time series of historical

corporate recovery rates is sourced from Moody’s annual publication on corporate defaults and

recovery rates.

The following table presents an analysis of the credit quality of treasury book exposures at amortised

cost and FVTPL. It indicates whether assets measured at amortised cost were subject to a 12-month

ECL or lifetime ECL allowance and, in the latter case, whether they were credit-impaired:

		2023				2022
					At amortised cost
	Fair value		Lifetime ECL
	through profit or		– not credit-	Lifetime ECL	Fair value through		Lifetime ECL – not	Lifetime ECL
	loss	12-month ECL	impaired	– credit-impaired	profit or loss	12-month ECL	credit-impaired	– credit-impaired
	£m	£m	£m	£m	£m	£m	£m	£m
AAA	–	–	–	–	−	−	−	−
AA+ to AA-	–	1,666.2	–	–	−	1951,9533.2	−	−
A+ to A-	–	681.3	–	–	−	535535.0	−	−
Gross carrying amounts	–	2,3 47.5	–	–	−	24,4888.2	−	−
Loss allowance		(0.1)	–	–	−	(010.1)	−	−
Carrying amount	–	2,3 47.4	–	–	−	22,4881.1	−	−
Cash and balances with central banks	–	1,038.3	–	–	−	141,412.9	−	−
Loans and advances to banks	–	14.5	–	–	−	30030.0	−	−
Unlisted debt securities	–	1,294.6	–	–	−	11,045.2	−	−
Carrying amount	–	2,3 47.4	–	–	−	22,4881.1	−	−

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

The movement in allowance for impairment for the treasury book during the year was as follows.

		Lifetime ECL
	12-month	– not credit-	Lifetime ECL	Total
	ECL	impaired	– credit-impaired	ECL
	£m	£m	£m	£m
Balance at 1 January 2023	0.1	–	–	0.1
Net remeasurement of loss allowance	–	–	–	–
Balance at 31 December 2023	0.1	–	–	0.1
Cash and balances with central banks	–	–	–	–
Loans and advances to banks	–	–	–	–
Unlisted debt securities	0.1	–	–	0.1
ECL provision	0.1	–	–	0.1

Investment management loan book assessment

Due to the lack of historical defaults within the investment management loan book, the model uses

publicly available default data for UK secured lending as a starting point in order to obtain an initial

estimate for PD. The 12-month PD is estimated as the historical long-term default rate on lending in

the UK as sourced from the Council of Mortgage Lenders (CML).

In order to estimate the PDs occurring over the lifetime of an underlying exposure, the group

develops its expectations of future progression in PiT default probabilities, which inherently revolves

around expectations of future development of macroeconomic factors relevant to the bank’s lending

portfolio, namely UK GDP (‘GDP’) and UK unemployment rates (UR).

In order to develop and apply such forward-looking expectations, a historical relationship between

PD, GDP and UR is estimated statistically through a multi-factor regression analysis of past

movements between these variables. The relationship resulting from this analysis reflects the

relative quantitative behaviour of the regressed macroeconomic factors against PD.

Using the calculated 12-month PiT PD as a starting point, conditional PDs for each future period

within the period of exposure are estimated by applying the GDP and UR coefficients to the group’s

forecasts of UK GDP and UK UR respectively, as sourced from International Monetary Fund (IMF)

forecast data. This analysis forms the base case scenario for estimating lifetime PDs. The same

methodology is applied for separate upside and downside scenarios as required by the standard.

The following table presents an analysis of the credit quality of investment management loan book

exposures at amortised cost. It indicates whether assets measured at amortised cost were subject to

a12a 12-month ECL or lifetime ECL allowance and, in the latter case, whether they were credit-impaired.

The categories below reflect the group’s internal affordability tests, which consider a range of factors

for the client, including their portfolio value, Experian score, and the length of their relationship with

the group. ‘High’ is an indication the client poses a high risk in terms of being able to afford

repayment of the loan facility. ‘Medium’ is an indication of a possibility the client may pose a risk in

terms of being able to afford repayment of the loan facility. ‘Low’ is where the risk of a client not being

able to repay the loan facility is considered reasonably low. ‘Very low’ is where the risk of a client not

being able to repay the loan facility is considered extremely low.

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The following table provides information about the exposure to credit risk and ECLs for trust and

financial planning debtors as at 31 December 2023:

		2023	2022
		£m	£m
Rathbones Trust Company		1.3	101.0
Rathbones Trust & Legal Services		0.2	00.2
Rathbone Financial Planning		0.7	00.5
Saunderson House		0.7	141.4
Gross carrying amounts		2.9	33.2
Loss allowance		(0.2)	(01)
Carrying amount		2.7	33.0
	Loss allowance

33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

		2023			2022
			At amortised cost
		Lifetime	Lifetime		Lifetime ECL
		ECL – not	ECL		– not	Lifetime ECL
	12-month	credit-	– credit-	12-month	credit-	– credit-
	E CL	impaired	impaired	ECL	impaired	impaired
	£m	£m	£m	£m	£m	£m
Very low	23.1	–	–	311.1	−	−
Low	70.2	–	–	1122.0	−	−
Medium	6.9	–	–	14.5	−	−
High	1.5	–	–	21.1	−	−
Gross carrying amounts	101.7	–	–	1597.7	−	−
Loss allowance	–	–	–	−	−	−
Carrying amount	101.7	–	–	1597.7	−	−

The movement in allowance for impairment of the investment management loan book during the

year was as follows.

		Lifetime ECL	Lifetime ECL
	12-month	– not credit-	– credit-
	ECL	impaired	impaired	Total ECL
	£m	£m	£m	£m
Balance at 1 January 2023	–	–	–	–
Net remeasurement of loss allowance	–	–	–	–
Balance at 31 December 2023	–	–	–	–


		Gross
	Weighted	carrying	Not credit	Credit
	average loss	amount	impaired	impaired	Total
Rathbones Trust Company	rate	£m	£m	£m	£m
<90 days overdue	0.3%	0.6	–	–	–
90-180 days overdue	1.4%	0.2	–	–	–
180-270 days overdue	2.6%	0.2	–	–	–
270-365 days overdue	4.4%	0.1	–	–	–
>365 days overdue	23.2%	0.2	(0.1)	–	(0.1)
		1. 3	(0.1)	–	(0.1)

Trust and financial planning debtors assessment

The group uses a provision matrix to measure the ECLs of trust and financial planning debtors,

whichcomprich comprise a large number of small balances. For such debts, a normal settlement period of up to

30 days is expected.

The weighted average loss rates are calculated with reference to the historic credit losses as a

proportion of the overall debtor balance within each aging category at the time of default. The current

period of assessment for the provision is five years.

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

At the prior year end, £00.03 million was recognised as an expected credit loss provision for

Rathbones Trust Company.

				Loss allowance
		Gross	Not
	Weighted	carrying	credit-	Credit-
	average loss	amount	impaired	impaired	Total
Rathbones Trust & Legal Services	rate	£m	£m	£m	£m
<90 days overdue	0.8%	0.2	–	–	–
90-180 days overdue	3.9%	–	–	–	–
180-270 days overdue	7.0 %	–	–	–	–
270-365 days overdue	12.7%	–	–	–	–
>365 days overdue	11.9%	–	–	–	–
		0.2	–	–	–

At the prior year end, £00.01 million was recognised as an expected credit loss provision for

Rathbones Trust & Legal Services.

				Loss allowance
		Gross	Not
	Weighted	carrying	credit-	Credit-
	average loss	amount	impaired	impaired	Total
Rathbone Financial Planning	rate	£m	£m	£m	£m
<90 days overdue	0.0%	0.3	–	–	–
90-180 days overdue	0.0%	0.1	–	–	–
180-270 days overdue	0.0%	0.1	–	–	–
270-365 days overdue	0.0%	0.1	–	–	–
>365 days overdue	0.0%	–	–	–	–
		0.6	–	–	–

At the prior year end, £nil was recognised as an expected credit loss provision for Rathbone Financial

Planning.

				Loss allowance
		Gross
	Weighted	carrying	Not credit	Credit
	average loss	amount	impaired	impaired	Total
Saunderson House	rate	£m	£m	£m	£m
<90 days overdue	0.0%	0.5	–	–	–
90-180 days overdue	12.9%	–	–	–	–
180-270 days overdue	50.0%	–	–	–	–
270-365 days overdue	50.0%	0.1	–	–	–
>365 days overdue	100.0%	0.1	(0.1)	–	(0.1)
		0.7	(0.1)	–	(0.1)

At the prior year end, £00.08 million was recognised as an expected credit loss provision for

Saunderson House.

The movement in allowance for impairment in respect of trust and financial planning debtors during

the year is set out below.

	Trust
	and financial
	planning debtors
Movement in impairment provision during the year	£m
At 1 January	0.1
Amounts written off	0.1
Change in credit risk	–
At 31 December 2023	0.2

Concentration of credit risk

The group has counterparty credit risk within its financial assets in that exposure is to a number of

similar credit institutions. The banking committee actively monitors counterparties and may reduce

risk by either suspending dealing or liquidating investments in light of adverse market information,

for example in anticipation of or in response to any formal Fitch or Moody’s rating downgrade.

Thismay happes may happen in relation to specific banks or banks within a particular country or sector.

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		United		Rest of
		Kingdom	Eurozone	the World	Total
At 31 December 2022		£m	£m	£m	£m
Cash and balances with central banks		1411,4129.9	−	−	1411,4129.9
Settlement balances		6545.4	01.1	030.3	6585.8
Loans and advances to banks		192192.9	−	11.8	1947.7
Loans and advances to customers:
—	overdrafts	585.8	010.1	07.7	666.6
—	investment management loan book	132132.5	080.8	26426.4	15979.7
—	trust and financial planning debtors	303.0	−	−	33.0
—	other debtors	050.5	−	−	00.5
Investment securities:
—	unlisted debt securities and money market
	funds	1596.6	25050.0	63575.7	101,0455.3
—	Other financial assets	8949.4	333.3	12012.0	1047.7
		206202,062.0	254254.3	67676.9	29,993.2

At 31 December 2023, materially all eurozone exposures were to counterparties based in the

Netherlands, France and Finland (2022: Netherlands, France and Finland) and materially all rest of

the world exposures were to counterparties based in Switzerland, Sweden, Norway, Canada, Japan,

United States of America and Australia (2022: Switzerland, Sweden, Norway, Canada and Australia).

At 31 December 2023, the group had exposure to the UK government through the holding of treasury

bills (2022: UK government through the holding of treasury bill).

33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

(a) Geographical sectors

The following table analyses the group’s credit exposures, at their carrying amounts, by geographical

region as at the balance sheet date. In this analysis, exposures are categorised based on the country of

domicile of the counterparty.

		United		Rest of
		Kingdom	Eurozone	the World	Total
At 31 December 2023		£m	£m	£m	£m
Cash and balances with central banks		1,038.3	–	–	1,038.3
Settlement balances		150.7	5.9	9.1	165.7
Loans and advances to banks		232.8	7.5	26.6	266.9
Loans and advances to customers:
—	overdrafts	9.3	0.1	0.3	9.7
—	investment management loan book	80.1	0.1	21.5	101.7
—	trust and financial planning debtors	2.7	–	–	2.7
—	other debtors	1.5	–	–	1.5
Investment securities:
—	unlisted debt securities	415.9	366.8	511.9	1,294.6
Other financial assets		164.4	10.9	16.0	191.3
		2,095.7	3 91.3	585.4	3,072.4

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(i) CREDIT RISK CONTINUED

(B) Industry sectors

The group’s credit exposures at the balance sheet date, analysed by the primary industry sectors in

which our counterparties operate, were:

				Clients
		Public	Financial	and other
		sector	institutions	corporate	Total
At 31 December 2023		£m	£m	£m	£m
Cash and balances with central banks		1,038.3	–	–	1,038.3
Settlement balances		–	163.9	1.8	165.7
Loans and advances to banks		–	266.9	–	266.9
Loans and advances to customers:
—	overdrafts	–	–	9.7	9.7
—	investment management loan book	–	–	101.7	101.7
—	trust and financial planning debtors	–	–	2.7	2.7
—	other debtors	–	–	1.5	1.5
Investment securities:
—	unlisted debt securities and money
	market funds	200.9	1,093.7	–	1,294.6
Other financial assets		6.4	56.8	128.1	191.3
		1,245.6	1,581.3	245.5	3,072.4

				Clients
		Public	Financial	and other
		sector	institutions	corporate	Total
At 31 December 2022		£m	£m	£m	£m
Cash and balances with central banks		1411,4129.9	−	−	1411,4129.9
Settlement balances		−	6565.8	−	6565.8
Loans and advances to banks		−	1947.7	−	1947.7
Loans and advances to customers:
—	overdrafts	−	−	666.6	666.6
—	investment management
	loan book	−	−	1597.7	1597.7
—	trust and financial planning debtors	−	−	303.0	303.0
—	other debtors	−	−	050.5	050.5
Investment securities:
—	unlisted debt securities and money market
	funds	24.6	101,0200.6	−	101,0455.2
Other financial assets		262.6	1111.8	9040.4	104.8
		141,4400.1	11,2922.9	2600.2	29,993.2

(ii) LIQUIDITY RISK

Liquidity risk is the risk that the group will encounter difficulty in meeting obligations associated

with financial liabilities that are settled by delivering cash or another financial asset.

The primary objective of the group’s treasury policy is to manage short- to medium-term liquidity

requirements. In addition to setting the treasury policy, Rathbones Investment Management

(‘theBahe Bank’) performs an annual assessment of liquidity adequacy in accordance with the regulatory

requirements of the Prudential Regulation Authority (PRA) (our Internal Liquidity Adequacy

Assessment Process). The Bank faces two principal risks, namely that a significant proportion

ofclof client funds are withdrawn over a short period of time (retail funding risk) and the risk that

marketable assets may not be capable of being realised in the time and at the value required

(marketable assets risk).

Funding risks are monitored by daily cash mismatch analyses and CRR ratios using expected cash

and asset maturity profiles and regular forecasting work. This is supported by stress tests which cover

firm-specific idiosyncratic scenarios and/or the effects of unforeseen market-wide stresses.

Marketable assets risk is primarily managed by holding cash and marketable instruments which are

realisable at short notice. The group operates strict criteria to ensure that investments are liquid and

placed with high-quality, investment grade counterparties. A minimum liquid assets buffer (to be

held in eligible liquid assets) is set by the board at least annually in conjunction with an amount

prescribed by the PRA.

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(ii) LIQUIDITY RISK CONTINUED

Non-derivative cash flows

The table below presents the undiscounted cash flows receivable and payable by the group under non-derivative financial assets and liabilities analysed by the remaining contractual maturities at the

balance sheet date.

			After 3 months	After 1 year
	On	Not more than	but not more	but not more		No fixed
	demand	3 months	than 1 year	than 5 years	After 5 years	maturity date	Total
At 31 December 2023	£m	£m	£m	£m	£m	£m	£m
Cash and balances with central banks	1,036.0	2.8	2.3	–	–	–	1,041.1
Settlement balances	6.4	159.3	–	–	–	–	165.7
Loans and advances to banks	245.4	21.5	–	–	–	–	266.9
Loans and advances to customers	11.5	3.4	3.2	115.0	–	–	133.1
Debt securities and money market funds	–	413.2	941.1	–	–	–	1,354.3
Equity securities	–	–	–	–	–	1.2	1.2
Other financial assets	1.1	157.0	3.3	0.3	–	–	161.7
Cash flows arising from financial assets	1,300.4	757. 2	949.9	115.3	–	1.2	3,124.0
Deposits by banks	12.4	–	–	–	–	–	12.4
Settlement balances	7.4	164.7	–	–	–	–	172.1
Due to customers	1,652.5	506.5	103.0	–	–	–	2,262.0
Subordinated loan notes	–	–	2.3	44.5	–	–	46.8
Lease liabilitiesies¹	–	–	–	–	–	–	–
Other financial liabilities	1.6	49.0	14.9	28.1	10.4	–	104.0
Cash flows arising from financial liabilities	1,673.9	720.2	120.2	72.6	10.4	–	2, 597. 3
Net liquidity gap	(373.5)	37.0	829.7	42.7	(10.4)	1.2	526.7
Cumulative net liquidity gap	(373.5)	(336.5)	493.3	536.0	525.5	526.7	–

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(ii) LIQUIDITY RISK CONTINUED

			After 3 months	After 1 year
	On	Not more than	but not more	but not more		No fixed
	demand	3 months	than 1 year	than 5 years	After 5 years	maturity date	Total
At 31 December 2022	£m	£m	£m	£m	£m	£m	£m
Cash and balances with central banks	141,4080.0	232.3	55.0	−	−	−	1411,4155.3
Settlement balances	−	6585.8	−	−	−	−	655.8
Loans and advances to banks	164.8	−	301.1	−	−	−	19494.9
Loans and advances to customers	828.2	343.4	232.3	16 77.6	−	−	1815181.5
Debt securities and money market funds	−	361961.9	710.5	−	−	−	11,0722.4
Equity securities	−	−	−	−	−	31.1	313.1
Other financial assets	454.5	8595.9	161.6	00.2	−	−	9292.2
Cash flows arising from financial assets	15855,585.5	5193.3	749.5	1677. 8	−	31.1	33,025025.2
Deposits by banks	101.0	−	−	−	−	−	101.0
Settlement balances	−	69969.9	−	−	−	−	69969.9
Due to customers	22,3280.0	1836.6	505.0	−	−	−	22,516.6
Subordinated loan notes	−	−	232.3	4686.8	−	−	4919.1
Lease liabilities	−	11.9	55.9	22222.2	377.8	−	677.8
Other financial liabilities	020.2	19919.9	00.2	545.4	44.5	−	3030.2
Cash flows arising from financial liabilities	22,3299.2	275275.3	13413.4	74.4	42342.3	−	27,7344.6
Net liquidity gap	(743.7)	24404.0	73616.1	93493.4	(42.3)	31.1	29060.6
Cumulative net liquidity gap	(743.7)	(499.8)	2364.4	32929.8	28 77.5	29060.6	−

Liabilities which do not have a contractual maturity date are categorised as ‘on demand’. Included

within the amounts due to customers on demand are balances which historical experience shows are

unlikely to be called in the short term. A prudent level of highly liquid assets is retained to cover

reasonably foreseeable short-term changes in client deposits. All debt securities are readily

marketable and can be realised through disposals.

The group holds equity investments worth £nil (2022: £8.1 million) which are subject to liquidity risk

but are not included in the table above. These units in collectives managed by Rathbones Asset

Management Ltd were sold during the period. The assets were previously held as fair value through

profit or loss securities and had no fixed maturity date; cash flows arose from receipt of dividends or

through sale of the assets.

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(ii) LIQUIDITY RISK CONTINUED

Off-balance-sheet items

Cash flows arising from the group’s off-balance-sheet financial liabilities (note 35) are summarised in

the table below.

The contractual value of the group’s commitments to extend credit to clients are analysed by the

duration of the commitment. Capital commitments are summarised by the earliest expected date

ofpayof payment.

		After 3	After 1
		months but	year but
	Not more	not more than	not more than	After
	than 3 months	1 year	5 years	5 years	Total
At 31 December 2023	£m	£m	£m	£m	£m
Loan commitments	15.4	–	–	–	15.4
Capital commitments	8.5	5.5	–	–	14.0
Total off-balance-sheet items	23.9	5.5	–	–	29.4

		After 3	After 1
	Not more	months but not	year but
	than 3	more	not more	After
	months	than 1 year	than 5 years	5 years	Total
At 31 December 2022	£m	£m	£m	£m	£m
Loan commitments	22522.5	−	−	−	22522.5
Capital commitments	050.5	−	−	−	00.5
Total off-balance-sheet items	23023.0	−	−	−	23023.0

Total liquidity requirement

			After 3	After 1
		Not more	months but	year but
	On	than 3	not more	not more	After
	demand	months	than 1 year	than 5 years	5 years	Total
At 31 December 2023	£m	£m	£m	£m	£m	£m
Cash flows arising from financial liabilities	1,673.9	720.2	120.2	72.6	10.4	2 ,5 97. 3
Total off-balance-sheet items	–	23.9	5.5	–	–	29.4
Total liquidity requirement	1,673.9	744.1	125.7	72.6	10.4	2,626.7

				After 1
			After 3	year but
		Not more	months but	not more
	On	than 3	not more	than 5	After
	demand	months	than 1 year	years	5 years		Total
At 31 December 2022	£m	£m	£m	£m	£m		£m
Cash flows arising from financial liabilities	22,3299.2	2753275.3	13413.4	74.4	42342.3		27,7346.6
Total off-balance-sheet items	−	23023.0	−	−	−		23023.0
Total liquidity requirement	22,329329.2	298298.3	13413.4	74.4	42342.3	2,75	77.6

(iii) MARKET RISK

Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will

fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the

value of a financial instrument will fluctuate because of changes in market interest rates.

The group’s principal exposure to cash flow interest rate risk arises from the mismatch between the

repricing of its financial assets and liabilities. In particular, customer accounts and loan balances are

repriced very shortly after changes in base rates, whereas the yield on the group’s interest-bearing

assets is correlated to the future expectation of base rates and varies depending on the maturity

profile of the group’s treasury portfolio. The average maturity mismatch is controlled by the banking

committee, which generally lengthens the mismatch when the yield curve is rising and shortens it

when the yield curve is falling.

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33 FINANCIAL RISK MANAGEMENT CONTINUED

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The table below shows the consolidated repricing profile of the group’s financial assets and liabilities, stated at their carrying amounts, categorised by the earlier of contractual repricing or maturity dates.

			After 3 months	After 6 months	After 1 year but		Non-
		Not more than	but not more	but not more	not more than	After	interest-
		3 months	than 6 months	than 1 year	5 years	5 years	bearing	Total
At 31 December 2023		£m	£m	£m	£m	£m	£m	£m
Assets
Cash and balances with central banks		1,036.0	–	–	–	–	2.3	1,038.3
Settlement balances		–	–	–	–	–	165.7	165.7
Loans and advances to banks		252.2	14.5	–	–	–	0.2	266.9
Loans and advances to customers		111.8	0.4	0.3	–	–	3.1	115.6
Investment securities:
—	equity securities	–	–	–	–	–	1.2	1.2
—	unlisted debt securities and money market funds	400.4	370.8	523.4	–	–	–	1,294.6
Other financial assets		0.5	–	–	–	–	190.8	191.3
Total financial assets		1,800.9	385.7	523.7	–	–	363.3	3,073.6
Liabilities
Deposits by banks		12.4	–	–	–	–	–	12.4
Settlement balances		–	–	–	–	–	172.1	172.1
Due to customers		2,108.9	99.2	–	–	–	45.2	2,253.3
Subordinated loan notes		–	–	–	39.9	–	–	39.9
Other financial liabilities		4.4	2.4	4.8	39.2	26.0	69.6	146.4
Total financial liabilities		2,125.7	101.6	4.8	79.1	26.0	286.9	2,624.1
Interest rate repricing gap		(324.8)	284.1	518.9	(79.1)	(26.0)	76.4	449.5

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			After 3 months	After 6 months	After 1 year		Non-
		Not more	but not more	but not more	but not more		interest-
		than 3 months	than 6 months	than 1 year	than 5 years	After 5 years	bearing	Total
At 31 December 2022		£m	£m	£m	£m	£m	£m	£m
Assets
Cash and balances with central banks		141,4080.0	−	−	−	−	494.9	141,412.9
Settlement balances		−	−	−	−	−	6565.8	655.8
Loans and advances to banks		164.5	30030.0	−	−	−	030.3	1944.8
Loans and advances to customers		166.0	−	−	−	−	33.8	1699.8
Investment securities:
—	equity securities	313.1	−	−	−	−	81.1	1111.2
—	unlisted debt securities and money market funds	3577.1	3131.1	3750375.0	−	−	−	11,0455.2
Other financial assets		00.6	−	−	−	−	104.1	1047.7
Total financial assets		2092,09939.3	34313.1	375075.0	−	−	1877.0	303,00444.4
Liabilities
Deposits by banks		101.0	−	−	−	−	−	101.0
Settlement balances		−	−	−	−	−	69969.9	69969.9
Due to customers		24,4467.7	494.9	−	−	−	6454.5	2,516.1
Subordinated loan notes		−	−	−	3939.9	−	−	3999.9
Other financial liabilities		11.2	11.2	26.6	1969.6	2525.9	28628.6	7919.1
Total financial liabilities		242,4489.9	616.1	262.6	59559.5	2595.9	163.0	27,706.0
Interest rate repricing gap		(34969.6)	3377.0	3724.4	(595)	(2595.9)	2414.1	29848.4

The banking committee has set an overall pre-tax interest rate exposure limit of £8it of £8.0 million (2022: £8: £8.0 million) for the total potential loss resulting from an unexpected immediate and sustained 2%

movement in sterling interest rates for the Bank, the principal operating subsidiary. The potential total loss is calculated on the basis of the average number of days to repricing of the interest-bearing

liabilities compared with the period to repricing on a corresponding amount of interest-bearing assets.

At 31 December 2023, the Bank had a net present value sensitivity of £75 mi.5 million (2022: £66.4 million) for an upward 2% shift in rates. The group held no forward rate agreements at 31 December 2023

(2022: none).

The Group has assessed the impact of climate change on the carrying amount of its financial assets and liabilities at year-end, and considers there to be no material impact.

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(iii) MARKET RISK CONTINUED

Foreign exchange risk

The group is exposed to translational foreign exchange risk as it undertakes transactions in foreign currencies and is therefore exposed to foreign exchange rate fluctuations. The group monitors its currency

exposures that arise in the ordinary course of business on a daily basis and significant exposures are managed through the use of spot contracts, from time to time, so as to reduce any currency exposure to a

minimal amount. The group has no structural foreign currency exposure.

The group does not have any material exposure to transactional foreign exchange risk. The table below summarises the group’s exposure to foreign currency translation risk at 31 December 2023. Included

in the table are the group’s financial assets and liabilities, at carrying amounts, categorised by currency.

		Sterling	US dollar	Euro	Other	Total
At 31 December 2023		£m	£m	£m	£m	£m
Assets
Cash and balances with central banks		1,038.3	–	–	–	1,038.3
Settlement balances		150.6	5.4	2.4	7. 3	165.7
Loans and advances to banks		230.3	13.2	18.7	4.7	266.9
Loans and advances to customers		109.3	5.1	1.2	–	115.6
Investment securities:
—	equity securities	–	–	1.2	–	1.2
—	unlisted debt securities and money market funds	1,259.3	35.3	–	–	1,294.6
Other financial assets		185.1	1.6	1.7	2.9	191.3
Total financial assets		2,972.9	60.6	25.2	14.9	3,073.6
Liabilities
Deposits by banks		12.4	–	–	–	12.4
Settlement balances		146.5	16.0	2.3	7.3	172.1
Due to customers		2,176.4	53.7	18.2	5.0	2,253.3
Subordinated loan notes		39.9	–	–	–	39.9
Other financial liabilities		146.2	0.2	–	–	146.4
Total financial liabilities		2,521.4	69.9	20.5	12.3	2,624.1
Net on-balance-sheet position		451.5	(9.3)	4.7	2.6	449.5
Loan commitments		15.4	–	–	–	15.4

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		Sterling	US dollar	Euro	Other	Total
At 31 December 2022		£m	£m	£m	£m	£m
Assets
Cash and balances with central banks		1411,4129.9	−	−	−	1411,4122.9
Settlement balances		63663.6	00.5	010.1	161.6	6565.8
Loans and advances to banks		1377.5	277.1	2020.0	10110.1	1947.7
Loans and advances to customers		1614161.4	565.6	22.8	−	1699.8
Investment securities:
—	equity securities	818.1	−	313.1	−	11.2
—	unlisted debt securities and money market funds	974.6	7070.7	−	−	11,0455.3
Other financial assets		1031.1	080.8	00.8	−	1047.7
Total financial assets		2862,86121.2	1047.7	268.8	11711.7	33,00444.4
Liabilities
Deposits by banks		101.0	−	−	−	101.0
Settlement balances		677.4	191.9	00.3	030.3	69969.9
Due to customers		23892,3894.4	91491.4	25125.1	10.2	2,5161.1
Subordinated loan notes		3939.9	−	−	−	3999.9
Other financial liabilities		78878.8	00.2	010.1	−	79179.1
Total financial liabilities		22,576.5	9393.5	2555.5	10.5	272,706.0
Net on-balance-sheet position		2847.7	11.2	11.3	11.2	29848.4
Loan commitments		22522.5	−	−	−	2222.5

A 10% weakening of the US dollar against sterling, occurring on 31 December 2023, would have

increased equity and profit after tax by £00.7 million (2022: reduced by £00.9 million). A 10%

weakening of the euro against sterling, occurring on 31 December 2023, would have reduced equity

and profit after tax by £00.4 million (2022: reduced by £00.1 million). A 10% strengthening of the US

dollar or euro would have had an equal and opposite effect. This analysis assumes that all other

variables, in particular other exchange rates, remain constant.

Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in market prices (other than those arising from interest rate risk or foreign

exchange risk). The group is exposed to price risk through its holdings of equity investment

securities, which are reported at their fair value (note 17).

At 31 December 2023, the fair value of listed equity securities recognised on the balance sheet was

£nil (2022: £8: £8.1 million). A 10% fall in global equity markets would, in isolation, have resulted in a

pre-tax decrease to net assets of £nil (2022: £05 m.5 million); there would have been no impact on profit

after tax. A 10% rise in global markets would have had an equal and opposite effect

NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(iii) MARKET RISK CONTINUED

Fair values

The table below analyses financial instruments measured at fair value into a fair value hierarchy

based on the valuation technique used to determine the fair value:

— Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

— Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or

liability, either directly or indirectly.

— Level 3: inputs for the asset or liability that are not based on observable market data.

		Level 1	Level 2	Level 3	Total
At 31 December 2023		£m	£m	£m	£m
Assets
Fair value through profit or loss:
—	equity securities	–	–	1.2	1.2
		–	–	1.2	1.2

		Level 1	Level 2	Level 3	Total
At 31 December 2022		£m	£m	£m	£m
Assets
Fair value through profit or loss:
—	equity securities	818.1	−	313.1	1111.2
		818.1	−	313.1	1111.2

The group recognises transfers between levels of the fair value hierarchy at the end of the reporting

period during which the change has occurred. There have been no transfers between levels during

the year (2022: none).

The fair value of listed equity securities is their quoted price.

The fair values of the group’s other financial assets and liabilities are not materially different from

their carrying values, with the exception of the following:

— Investment debt securities measured at amortised cost (note 17) comprise bank and building

society certificates of deposit, which have fixed coupons, and treasury bills. The fair value of the

debt securities at 31 December 2023 was £1296,2968 mi.8 million (2022: £105,0533.5 million) and the

carrying value was £1294,2946 m.6 million (2022: £1045,0453 mi.3 million). Fair value of debt securities is based

on market bid prices, and hence would be categorised as level 1 within the fair value hierarchy.

— Subordinated loan notes (note 28) comprise Tier 2 loan notes. The fair value of the loan notes at 31

December 2023 was £374 mi.4 million (2022: £412 m.2 million) and the carrying value was £399 mi.9 million

(2022: £399 mi.9 million). Fair value of the loan notes is based on discounted future cash flows using

current market rates for debts with similar remaining maturity, and hence would be categorised as

level 2 in the fair value hierarchy.

Level 3 financial instruments

Fair value through profit or loss

At 31st December 2023, the group held 517 shares in Euroclear Holdings SA, which are classed as

Level 3 in the fair value hierarchy, since readily available observable market data is not available.

Atthe pAt the prior year-end, the Group held 1809 sha,809 shares which were valued at £31 mi.1 million by reference to

the indicative price derived from the most recent transactions of the shares in the market. During the

year, the group sold 129,292 of its shares in two separate transactions. The price was used to value the

remaining shares at year-end.

The valuation at the balance sheet date has been adjusted for movements in exchange rates since the

acquisition date. A 10% weakening of the euro against sterling, occurring on 31 December 2022,

would have reduced equity and profit after tax by £01 mi.1 million (2022: £03 mi0.3 million). A 10%

strengthening of the euro against sterling would have had an equal and opposite effect.

Changes in the fair values of financial instruments categorised as level 3 within the fair value

hierarchy were as follows:

	2023	2022
At 1 January	3.1	252.5
Total unrealised gains/(losses) recognised in profit or loss	1.0	00.6
Total disposals	(2.9)	−
At 31 December	1.2	313.1

The gains or losses relating to the fair value through profit or loss equity securities is included within

‘other operating income’ in the consolidated statement of comprehensive income.

There were no other gains or losses arising from changes in the fair value of financial instruments

categorised as level 3 within the fair value hierarchy.

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33 FINANCIAL RISK MANAGEMENT CONTINUED

(iv) PENSION RISK

The main risks to the group arising from both schemes are in respect of:

— Volatility of assets: In accordance with the requirements of IAS19, the discount rate used for

valuing the Schemes' defined benefit obligations has been derived from the yield available on

suitably dated 'high quality' (AA-rated) corporate bonds at the effective date. The schemes' assets

are invested in instruments other than such bonds, and so relative under-performance will lead to

a fall in the balance sheet position

— Changes in Bond yields: A change in the yields of corporate bonds used to set the discount rate will

affect the value placed on the Schemes' defined benefit obligations. This is expected to be partially

mitigated by the holding of corporate bonds by the schemes

— Inflation: The value placed on the schemes' defined benefit obligations are linked to inflation. If

actual levels of inflation are higher or lower than the assumed rate of inflation, or the assumed rate

of inflation changes, this will affect the value of the schemes' defined benefit obligations. Both

schemes holds investments linked to future inflation rates (including Liability Driven

Investments), which act to provide protection to the balance sheet position from inflation changes.

Investments), which act to provide protection to the balance sheet position from inflation changes

— Life Expectancy (mortality): Members and their spouses receive benefits payable over their

lifetime, so an increase in future life expectancies will result in pensions being assumed to be paid

for longer, and an increase in the defined benefit obligation.

34 CAPITAL MANAGEMENT

Rathbones Group Plc’s capital is defined for accounting purposes as total equity. As at 31 December

2023 this totalled £13,350.1 million (2022: £6348 m.8 million).

In 2021 Rathbones Group Plc issued £4040.0 million of 10-year tier 2 notes with a call option in October

2026 and annually thereafter (note 28). As at 31 December 2023, the carrying value of the notes was

£399 mi.9 million (2022: £399 mi.9 million). From time to time, the group also runs small overnight overdraft

balances as part of working capital.

The group’s objectives when managing capital are to:

— safeguard the group’s ability to continue as a going concern so that it can continue to provide

returns for shareholders and benefits for other stakeholders

— maintain a strong capital base in a cost-efficient manner to be able to support the development of

the business when required

— optimise the distribution of capital across group companies, reflecting the requirements of each

business

— strive to make capital freely transferable across the group where possible

— comply with regulatory requirements at all times.

Rathbones is classified for capital purposes as a banking group and performs an ICAAP, which is

prepared on an annual basis and presented to the PRA on request. Regulatory capital resources for

ICAAP purposes are calculated in accordance with published rules. These require certain

adjustments to and certain deductions from accounting capital, the latter largely in respect of

intangible assets. The ICAAP compares regulatory capital resources against regulatory capital

requirements derived using the PRA’s Pillar 1 and Pillar 2 methodology. The group has adopted the

standardised approach to calculating its Pillar 1 credit risk component and the basic indicator

approach to calculating its operational risk component. Capital management policy and practices are

applied at both group and entity level.

At 31 December 2023 the group’s regulatory capital resources, including retained earnings for 2023,

were £4714 mi.4 million (2022: £3388 mi38.8 million). The increase in reserves during 2023 is due to an

increase in the group’s retained earnings, on account of profits generated in the year, and newly

issued shares in the year for employee remuneration awards.

In addition to a variety of stress tests performed as part of the ICAAP process, and daily reporting in

respect of treasury activity, capital levels are monitored and forecast on a monthly basis to ensure

that dividends and investment requirements are appropriately managed and appropriate buffers are

kept against adverse business conditions.

No breaches were reported to the PRA during the financial years ended 31 December 2022 and 2023.

The group has not applied transitional relief in recognising expected credit losses (ECLs) in regulatory

capital resources. As such, there is no difference between accounting ECLs and regulatory capital ECLs.

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35 CONTINGENT LIABILITIES AND COMMITMENTS

(a) Capital expenditure authorised and contracted for at 31 December 2023 but not provided in the

financial statements amounted to £144.0 million relating to expenditure on fixtures and fittings

and software (2022: £05 m.5 million ).

(b) The contractual amounts of the group’s commitments to extend credit to its clients are

asfolas follows:

	2023	2022
	£m	£m
Undrawn commitments to lend of 1 year or less	11.8	177.9
Undrawn commitments to lend of more than 1 year	3.6	464.6
	15.4	22522.5

protect depositors and investors from loss in in the event of failure of financial institutions has

resulted in significant levies on the industry in recent years. The financial impact of unexpected

FSCS levies is largely out of the group’s control as they result from other industry failures.

There is uncertainty over the level of future FSCS levies as they depend on the ultimate cost to

the FSCS of industry failures. The group contributes to the deposit class, investment fund

management class and investment intermediation levy classes and accrues levy costs for future

levy years when the obligation arises.

36 RELATED PARTY TRANSACTIONS

Transactions with key management personnel

The remuneration of the key management personnel of the group, who are defined as the company’s

directors and other members of senior management who are responsible for planning, directing and

controlling the activities of the group, is set out below.

Gains on options exercised by directors during the year totalled £nil (2022: £nil). Further information

about the remuneration of individual directors is provided in the audited part of the directors’

remuneration report on page 132.

	2023	2022
	£m	£m
Short-term employee benefits	13.2	1010.2
Post-employment benefits	0.3	00.3
Other long-term benefits	1.3	00.3
Share-based payments	2.6	040.4
	17.4	1111.2

Dividends totalling £03 mi.3 million were paid in the year (2022: £02 m.2 million) in respect of ordinary

shares held by key management personnel and their close family members.

At 31 December 2023, key management personnel and their close family members had gross

outstanding deposits of £10 mi.0 million (2022: £1.7 million) and gross outstanding banking loans of

£00.1 million (2022: nil). A number of the group’s key management personnel and their close family

members make use of the services provided by companies within the group. Charges for such

services are made at various staff rates. All transactions were made on normal business terms.

Other related party transactions

The group’s transactions with the pension funds are described in note 29. At 31 December 2023, no

amounts were outstanding with either the Laurence Keen Scheme or the Rathbone 1987 Scheme

(2022: none).

As a result of the IW&I transaction on 21 September 2023, Rathbones Group Plc is an associate of

Investec Bank PLC. As at the 31 December there was a net payable balance with Investec Bank PLC of

£83 mi.3 million (2022: £nil). IW&I outsources payroll to Investec Bank PLC (for which a charge is levied

under the transitional services agreement), the balance outstanding as at the reporting date is

predominantly related to IW&I employee salary costs and associated payroll taxes. During the period

from acquisition, Investec Bank PLC have provided certain services to IW&I via the transitional

services agreement. The total expense for these services recognised during the period from 21

September 2023 to 31 December 2023 is £48 mi4.8 million (2022: £nil). These amounts were fully paid as

at 31 December 2023. IW&I partially sublets certain regional office space to Investec Bank PLC

companies and charges Investec Bank PLC for use of research, total fees receivable under these

arrangements 21 September 2023 to 31 December 2023 were £00.1 million and £03 m.3 million

respectively (2022: nil).

One group subsidiary, Rathbones Asset Management Limited, has authority to manage the

investments within a number of unit trusts. During 2023, the group managed 28 unit trusts,

Sociétésd’iétés d’Investissement à Capital Variable (SICAVs) and open-ended investment companies (OEICs)

(together, ‘collectives’) (2022: 32 unit trusts and OEICs).

The group charges each fund an annual management fee for these services, but does not earn any

performance fees on the unit trusts. The management charges are calculated on the bases published

in the individual fund prospectuses, which also state the terms and conditions of the management

contract with the group

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36 RELATED PARTY TRANSACTIONS CONTINUED

The following transactions and balances relate to the group’s interest in the unit trusts:

	2023	2022
Year ended 31 December	£m	£m
Total management fees	69.6	6828.2

	2023	2022
As at 31 December	£m	£m
Management fees owed to the group	6.5	55.6
Holdings in unit trusts (note 17)	–	81.1
	6.5	137.7

Total management fees are included within ‘fee and commission income’ in the consolidated

statement of comprehensive income.

Management fees owed to the group are included within ‘accrued income’ and holdings in unit trusts

are classified as ‘fair value through profit or loss equity securities’ in the consolidated balance sheet.

The maximum exposure to loss is limited to the carrying amount on the balance sheet as disclosed

above.

All amounts outstanding with related parties are unsecured and will be settled in cash.

NoguNo guarantees have been given or received. No expected credit loss provisions have been made in

respect of the amounts owed by related parties.

37 INTEREST IN UNCONSOLIDATED STRUCTURED ENTITIES

As described in note 36, at 31 December 2023, the group owned units in collectives managed by

Rathbones Asset Management Limited with a value of £nil (2022: £8.1 million), representing 0ng 0.0%

(2022: 008%.08%) of the total value of the collectives managed by the group. These assets are held to

hedge the group’s exposure to deferred remuneration schemes for employees of Unit Trusts.

The group’s primary risk associated with its interest in the unit trusts is from changes in the fair value

of its holdings in the funds.

The group is not judged to control, and therefore does not consolidate, the collectives. Although the

fund trustees have limited rights to remove Rathbones Asset Management Limited, the group is

exposed to very low variability of returns from its management and share of ownership of the funds

and is therefore judged to act as an agent rather than having control under IFRS 10.

38 CONSOLIDATED STATEMENT OF CASH FLOWS

For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise the

following balances with less than three months until maturity from the date of acquisition:

	2023	2022
	£m	£m
Cash and balances at central banks (note 14)	1,036.0	11,408.0
Loans and advances to banks (note 15)	266.9	1647.7
At 31 December	1,302.9	151,5727.7

Mandatory reserve deposits of £2its of £2.3 million (2022: £50 mi.0 million) are held with central banks in

accordance with statutory requirements. As these deposits are not held in demand accounts,

and are not available to finance the group's day-to-day operations, they are excluded from cash

and cash equivalents.

Cash flows arising from the issue/(repurchase) of ordinary shares comprise:

	2023	2022
	£m	£m
Share capital issued (note 30)	2.2	010.1
Share premium on shares issued (note 30)	2.3	189.9
Merger reserve on shares issued (note 30)	747.4	−
Shares issued in relation to share-based schemes and business
combinations for which no cash consideration was received	(751.9)	(98)
Proceeds from issue of share capital	–	99.3
Shares repurchased and placed into the employee benefit trust (note 31)	(16.0)	(186.6)
Net issue/(repurchase) of ordinary shares	(16.0)	(93)

In 2022, £5.7 million of shares were issued for the vesting of the Speirs & Jeffrey second earn-out

consideration. £44.1 million of shares were also issued for the Saunderson House deferred share

consideration. There was no cash consideration received for these transactions. £186 mi8.6 million of

shares were repurchased and placed into the group EBT in the prior year.

During the year, £7519 mi.9 million of shares were issued as consideration for the IW&I transaction,

therewas no cre was no cash consideration received for this transaction. In addition to this, £166.0 million of

shares were repurchased and placed into the group EBT.

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NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

38 CONSOLIDATED STATEMENT OF CASH FLOWS CONTINUED

A reconciliation of the movements of financing liabilities and equity to cash flows arising from financing activities is as follows:

			Liabilities from
	Subordinated		financing	Share capital/		Retained	Total
	loan notes	Lease liabilities	activities	premium	Reserves	earnings	equity	Total
	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2023	39.9	50.5	90.4	313.2	24.4	2 97. 2	634.8	725.2
Changes from financing cash flows
Proceeds from issue of share capital	–	–	–	2.3	(2.3)	–	–	–
Payments for share repurchases	–	–	–	–	(16.0)	–	(16.0)	(16.0)
Dividends paid	–	–	–	–	–	(71.4)	(71.4)	(71.4)
Interest charge	(2.3)	(3.3)	(5.6)	–	–	–	–	(5.6)
Payment for lease liabilities	–	( 7.5)	(7.5)	–	–	–	–	( 7.5)
Total financing cash flows	(2.3)	(10.8)	(13.1)	2.3	(18.3)	(71.4)	(87.4)	(100.5)
Total non-cash movements	2.3	35.2	37. 5	2.2	762.7	37.9	802.8	840.3
At 31 December 2023	39.9	74.9	114.8	31 7.7	768.8	263.7	1,350.2	1,465.0

			Liabilities from
	Subordinated		financing	Share capital/		Retained	Total
	loan notes	Lease liabilities	activities	premium	Reserves	earnings	equity	Total
	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2022	3939.9	55055.0	9494.9	29414.1	4030.3	288888.8	6232623.2	71818.1
Changes from financing cash flows
Proceeds from issue of share capital	−	−	−	99.3	−	−	99.3	99.3
Payments for share repurchases	−	−	−	−	(186.6)	−	(186.6)	(186.6)
Dividends paid	−	−	−	−	−	(486.6)	(48.6)	(48.6)
Interest charge	(23)	(31.1)	(54)	−	−	−	−	(54)
Payment for lease liabilities	−	(85.5)	(85)	−	−	−	−	(85)
Total financing cash flows	(23)	(116)	(139)	99.3	(186)	(48.6)	(579.9)	(711.8)
Total non-cash movements	232.3	77.1	949.4	99.8	27.7	577.0	6959.5	78978.9
At 31 December 2022	3939.9	5050.5	904.4	313.2	244.4	2977. 2	6348634.8	7255.2

39 EVENTS AFTER THE BALANCE SHEET DATE

There have been no material events occurring between the balance sheet date and the date of signing this report.

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NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED

40 COUNTRYY-BYY-COUNTRY REPORTING

HM Treasury has transposed the requirements set out under the Capital Requirements Directive IV (CRD IV) and issued the Capital Requirements Country-by-Country Reporting Regulations 2013, effective

1 January 2014. The legislation requires Rathbones Group Plc (together with its subsidiaries, ‘the group’) to publish certain additional information, on a consolidated basis, for the year ended 31 December 2023.

BASIS OF PREPARATION:
Country	In most cases, we have determined the country by reference to the country of tax residence. Where an entity is not subject to tax (e.g. a partnership) we have considered the location
	of management or the jurisdiction in which the revenues are generated. In these cases it is possible that tax is paid in a different country to the one in which profits are reported.
Nature of activities	The nature of activities within the United Kingdom are described within our services on page 2. Discretionary investment management is the sole activity which occurs in Jersey.
Turnover	Turnover is defined as operating income. As the consolidated results are split by country, there is an element of double counting when inter-jurisdictional transactions (for example,
	the payment of dividends) occur. The entries to eliminate this double counting are included at the bottom of the table to enable the disclosed figures to agree to the published
	consolidated accounts of the group.
Profit/(loss) before	These are accounting profits. As with turnover some double counting may arise and again this has been eliminated at the bottom of the table. The majority of the total relates to the
taxation	elimination of inter-jurisdictional dividends, which are reflected as profits in the United Kingdom.
Tax paid	This column reflects corporation tax actually paid in the year. Note that it is rare that tax paid in any given year relates directly to the profits earned in the same period.
Public subsidies	The group received no public subsidies in the year.
received
Number of	The number of employees reported is the average number of full-time employees who were permanently employed by the group, or one of its subsidiaries, during the year.
employees	Contractors are excluded.
Subsidiaries	A list of the subsidiaries of the group, including their main activity and country of incorporation, is shown within note 45.

Country

		Profit/(loss)
		before
	Turnover	taxation	Tax paid	Number of
	£m	£m	£m	employees
United Kingdom	570.0	108.0	29.2	2,468
Channel Islands	6.3	(6.1)	0.3	30
Sub-total	576.3	101.9	29.5	2,498
Inter-group eliminations and other entries arising on consolidation	(5.2)	(44.3)	–	–
Total	571.1	57.6	29.5	2,498

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212RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2023

Note

capital

£m

premium

£m

Merger

reserve

£m

Own

£m

Retained

earnings

£m

Total

equity

£m

At 1 January 2022 31 2910 451 (366) 1434 4460

Profit for the year

403 403

Net remeasurement of defined benefit liability 54 − − − − ( 71) (71)

Deferred tax relating to components of other comprehensive income 49 − − − − 34 34

Other comprehensive income net of tax − − − − (37) (37)

Dividends paid 44 − − − − (486) (486)

Issue of share capital 55 01 190 − − − 191

Share-based payments:

— cost of share-based payment arrangements − − − − 259 259

— cost of vested employee remuneration and share plans − (128) (128)

— cost of own shares acquired 55 27 (27) −

— cost of own shares vesting 55 − − − (187) − (187)

— tax on share-based payments − − − − 13 13

At 31 December 2022 32 3100 451 (526) 1431 4488

Profit for the year 633 633

Net remeasurement of defined benefit liability 54 − − − − (58) (58)

Deferred tax relating to components of other comprehensive income 49

– – – – 1.5 1.5

Other comprehensive income net of tax – – – – (4.3) (4.3)

Dividends paid 44 – – – – (71.4) (71.4)

Issue of share capital 55 2.2 2.3 747.4 – – 751.9

Share-based payments:

— cost of share-based payment arrangements

– – – – 24.0 24.0

— cost of vested employee remuneration and share plans – (6.0) (6.0)

— cost of own shares vesting – – – 13.0 (13.0) –

— cost of own shares acquired 55 – – – (16.0) – (16.0)

— tax on share-based payments – – – – (0.4) (0.4)

At 31 December 2023 5.4 312.3 792.5 (55.6) 135.3 1,189.9

The accompanying notes form an integral part of the company financial statements.

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213RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

COMPANY BALANCE SHEET

FOR THE YEAR ENDED 31 DECEMBER 2023

Note

2023

£m

2022

£m

Non-current assets

Investment in subsidiaries 45

1,173.4 4215

Other investments 46

– 80

Right-of-use assets 48

33.2 383

Deferred tax 49

7.5 96

Net defined benefit asset 54

7.0 94

1,221.1 4868

Current assets

rade and other receivables 47

143.6 1189

Cash and cash equivalents

16.3 566

159.9 1755

otal assets

1,381.0 6623

urrent liabilities

rade and other payables 50

(95.4) (1140)

Lease liabilities 51

(5.3) (48)

Provisions 52

(4.7) (15)

(105.4) (1203)

et current assets

54.5 552

on-current liabilities

rovisions 52

(5.4) (83)

Subordinated loan notes 53

(39.9) (399)

Lease liabilities 51

(40.4) (449)

(85.7) (931)

Total liabilities

(191.1) (2134)

Net assets

1,189.9 4489

Note

2023

£m

2022

£m

Equity

Share capital 55

5.4 32

Share premium 55

312.3 3100

Merger reserve 55

792.5 451

Own shares 55

(55.6) (525)

Retained earnings

135.3 1431

Equity shareholders' funds

1,189.9 4489

As permitted by section 408 of the Companies Act 2006 the company has elected not to present its

own statement of comprehensive income for the year. Rathbones Group Plc reported a profit after tax

for the financial year ended 31 December 2023 of £633 million (2022: £403 million).

The financial statements were approved by the board of directors and authorised for issue on 5 March

2024 and were signed on its behalf by:

Paul Stockton Iain Hooley

Group Chief Executive Officer Group Chief Financial Officer

Company registered number: 01000403

The accompanying notes form an integral part of the company financial statements.

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214RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2023

Note

2023

£m

2022

£m

Cash flows from operating activities

Profit before tax

63.9 426

Change in fair value through profit or loss

(0.1) 09

Impairment losses 45

– 07

Net interest and dividend income

(90.9) (504)

Net charge for provisions 52

6.6 09

Depreciation and amortisation

7.0 5.0

Defined benefit pension scheme (credits)/charges 54

(0.5) (03)

Defined benefit pension scheme contributions paid 54

(2.9) (39)

Share-based payment charges 55

24.0 259

7.1 214

Changes in operating assets and liabilities:

— net (increase)/decrease in prepayments, accrued income

and other assets

(42.7) 512

— net decrease in accruals, provisions and other liabilities

(14.2) (7 3)

Cash (used in)/generated from operations

(49.8) 653

Tax (paid)/received

2.6 (01)

Net cash (outflow)/inflow from operating activities

(47. 2) 652

Cash flows from investing activities

nterest received

3.9 5.7

Inter-company dividends received

92.0 50.0

Payment of deferred consideration

– (10.9)

Purchase of investment securities

– (25)

Proceeds from sale and redemption of investment securities

8.1 09

Net cash generated from investing activities

104.0 432

Note

2023

£m

2022

£m

Cash flows from financing activities

Issue of ordinary shares 55

– 9.3

Repurchase of ordinary shares 55

(16.0) (18.6)

Dividends paid 44

(71.4) (486)

Payment of lease liabilities 51

(4.7) (7 8)

Interest paid

(5.0) (53)

Net cash used in financing activities

(97.1) (709)

Net (decrease)/increase in cash and cash equivalents

(40.3) 3 75

Cash and cash equivalents at the beginning of the year

56.6 191

Cash and cash equivalents at the end of the year 60

16.3 566

The accompanying notes form an integral part of the consolidated financial statements.

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215RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS

41 SIGNIFICANT ACCOUNTING POLICIES

STATEMENT OF COMPLIANCE

The separate financial statements of the company are presented as required by the Companies Act

2006 and have been prepared in accordance with UK-adopted International Accounting Standards

and IAS 27 ‘Separate Financial Statements’.

On publishing the parent company financial statements here together with the group financial

statements, the company is taking advantage of the exemption in section 408 of the Companies Act

2006 not to present its individual statement of comprehensive income and related notes that form a

part of these approved financial statements.

DEVELOPMENTS IN REPORTING STANDARDS AND INTERPRETATIONS

Developments in reporting standards and interpretations are set out in note 13 to the consolidated

financial statements.

PRINCIPAL ACCOUNTING POLICIES

The financial statements have been prepared on the historical cost basis, except for the revaluation of

certain financial instruments. The principal accounting policies adopted are as set out below.

INVESTMENTS IN SUBSIDIARIES

Investments in subsidiaries are stated at cost less, where appropriate, provision for impairment.

MANAGEMENT CHARGES

Intra-group management charges arise in relation to staff costs and other administrative expenses

that are initially borne by the company and then recharged to other group companies, when incurred.

Accounting policies in relation to impairment, interest income, dividend income, leases, foreign

currency, retirement benefit obligations, taxation, cash and cash equivalents and share-based

payments are set out in note 1 to the consolidated financial statements.

42 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

The critical accounting judgements and key sources of estimation uncertainty arise from the

company’s defined benefit pension schemes and valuation of the consideration payable for

Saunderson House and Investec Wealth & Investment. These are described in note 2 to the

consolidated financial statements.

43 EXPENSES FOR THE YEAR

The auditor’s remuneration for audit and other services to the company is set out in note 7 to the

consolidated financial statements.

The average number of employees, on a full-time-equivalent basis, during the year was as follows:

2023 2022

Wealth Management:

— investment management services

1,086 1042

— advisory services

161 155

Asset Management

52 50

Shared services

617 543

1,916 1791

44 DIVIDENDS

Details of the company’s dividends paid and proposed for approval at the Annual General Meeting

are set out in note 12 to the consolidated financial statements.

The company’s dividend policy is described in the directors’ report on page 145.

The merger reserve is used where more than 90% of the share capital in a subsidiary is acquired and

the consideration includes the issue of new shares by the Company, thereby attracting merger relief

under Section 612 of the Companies Act 2006.

Reserves available for distribution as at 31 December were as follows:

2023

£m

2022

£m

Net assets 1,189.9 4489

Less:

— share capital

(5.4) (32)

— share premium

(312.3) (3100)

— merger reserve

(792.5) (451)

— Unrealised profits

(9.6) −

Distributable reserves

70.1 906

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216RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

44 DIVIDENDS CONTINUED

Movements in reserves available for distribution were as follows:

2023

£m

2022

£m

As at 1 January 90.6 1068

Profit for the year

63.3 403

Net remeasurement of defined benefit liability/asset

(4.3) (37)

Dividends paid

(71.4) (486)

Unrealised profits

(9.6) −

Other movements

1.5 (41)

As at 31 December

70.1 906

45 INVESTMENT IN SUBSIDIARIES

	Equities	Total
	£m	£m
At 1 January 2022	4222422.2	4222.2
Additions
Disposals	(07.7)	(070.7)
At 1 January 2023	421.5	421.5
Additions	751.9	751.9
Disposals	–	–
At 31 December 2023	1,173.4	1,173.4

The additions in the year of £7519 mi.9 million relate to the acquisition of Investec Wealth & Investment

(see note 8).

An impairment review is undertaken at the end of each reporting period when indicators of potential

impairment are identified. Where impairment may be indicated, a test of carrying value against the

recoverable value is performed. The recoverable amount is calculated as the value in use (VIU) which

is derived from the present value of future cash flows expected to be received from the investment.

Impairment is recognised where the investment exceeds the recoverable amount. No indicators of

impairment have been identified this financial period (2022: £00.7 million).

EQUITIES

At 31 December 2023 the company’s subsidiary undertakings were as follows:

		Company
		registration
Subsidiary undertaking	Activity and operation	number
Rathbones Investment Management Limited	Investment management and
	banking services	1448919
Rathbones Investment Management International
Limited*	Investment management	50503
Rathbones Trust Company Limited	Trust and tax services	1688454
Rathbones Asset Management Limited	Asset Management	2376568
Arcticstar Limited**	Introducer of private clients	3898083
Vision Independent Financial Planning Limited	Financial planning services	6650476
Castle Investment Solutions Limited	Investment support services	7370865
Rathbones Legal Services Limited*	Trust and legal services	10514352
Laurence Keen Holdings Limited**	Intermediate holding company	2474285
Rathbone Directors Limited*	Corporate director services	4410000
Rathbone Secretaries Limited*	Corporate secretarial services	4627820
Laurence Keen Nominees Limited*	Corporate nominee	2801952
Neilson Cobbold Client Nominees Limited*	Corporate nominee	3217430
Rathbone Nominees Limited*	Corporate nominee	646336
Citywall Nominees Limited*	Corporate nominee	3070653
Penchart Nominees Limited*	Corporate nominee	2608726
Argus Nominee Limited	Corporate nominee	11395344
Rathbone Brothers Ltd	Non-trading	12866506
Rathbone Pension & Advisory Services Limited	Non-trading	5679426
Rathbone Stockbrokers Limited*	Non-trading	2483921
Dean River Asset Management Limited*	Non-trading	SC204313
R.M. Walkden & Co. Limited*	Non-trading	1246166
Rathbone Funds Advisers Unipessoal LDA
(entitydity dissolved 9 January 2023)*	European fund marketing	515534528
Speirs & Jeffrey Limited**	Investment management	SC098335
Speirs & Jeffrey Client Nominees Limited*	Corporate nominee	SC162589
Speirs & Jeffrey Portfolio Management Limited*	Corporate nominee	SC122842
Speirs & Jeffrey Fund Management Limited*	Corporate nominee	SC095908
Saunderson House Limited	Financial planning and
	investment management	940473

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217RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

		Company
		registration
Subsidiary undertaking	Activity and operation	number
CastleCo Limited	Non-trading	130602
HouseCo Limited	Non-trading	130603
CabinCo Limited	Non-trading	130601
CottageCo Limited	Non-trading	131144
Investec Wealth & Investment Limited	Investment management	02122340
Bell Nominees Limited	Corporate nominee	00625232
Investment Administration Nominees Limited	Corporate nominee	02075505
R.& R. Nominees Limited	Corporate nominee	00790828
Tudor Nominees Limited	Corporate nominee	02016278
Carr PEP Nominees Limited	Corporate nominee	02560336
Ferlim Nominees Limited	Corporate nominee	01022478
Murray Asset Management UK Limited	Asset Management	09447298
Castle Street Nominees UK Limited	Corporate nominee	09329323
Murray Asset Nominees UK Limited	Corporate nominee	09329081
Click Nominees Limited	Corporate nominee	03276308
PEP Services (Nominees) Limited	Corporate nominee	02368386
Murray Asset Management Limited	Corporate nominee	SC173493
Murray Investment Management Limited	Corporate nominee	SC173492
Murray Asset Nominees Limited	Corporate nominee	SC196715
Spring Nominees Limited	Corporate nominee	01747036
Anston Trustees Limited	Trustee Company	02826318
Carr Investment Services Nominees Limited	Corporate nominee	02620560
Investec Wealth & Investment Trustees Limited	Trustee Company	02243919
Rensburg Client Nominees Limited	Corporate nominee	02020824
Scarwood Nominees Limited	Corporate nominee	01147539
Castle Street Nominees Limited	Corporate nominee	SC050721
Hero Nominees Limited	Corporate nominee	34543
Investec Wealth & Investment (Channel Islands) Limited	Investment management	54988
Torch Nominees Limited	Corporate nominee	54991

* Held by subsidiary undertaking

** UK subsidiary has taken an exemption from audit under section 479A of the Companies Act 2006 for the year ended 31

December 2023

The registered office for all subsidiary undertakings is 8 Finsbury Circus, London EC2M 7AZ except

for the following:

Subsidiary undertaking	Registered office
Rathbones Investment Management Limited	Port of Liverpool Building, Pier Head, Liverpool L3
	1NW
Rathbones Investment Management International	26 Esplanade, St Helier, Jersey JE12RBE1 2RB
Limited
Vision Independent Financial Planning Limited	Vision House, Unit 6A Falmouth Business Park,
	Bickland Water Road, Falmouth, Cornwall TR114SZ1 4SZ
Castle Investment Solutions Limited	Vision House, Unit 6A Falmouth Business Park,
	Bickland Water Road, Falmouth, Cornwall TR114SZ1 4SZ
Speirs & Jeffrey Limited	George House, 50 George Square, Glasgow G21EHasgow G2 1EH
Speirs & Jeffrey Client Nominees Limited	George House, 50 George Square, Glasgow G21EHsgow G2 1EH
Speirs & Jeffrey Portfolio Management Limited	George House, 50 George Square, Glasgow G21EHsgow G2 1EH
Speirs & Jeffrey Fund Management Limited	George House, 50 George Square, Glasgow G21E2 1EH
Dean River Asset Management Limited	10 George Street, Edinburgh EH22PFH2 2PF
Rathbone Funds Advisers Unipessoal LDA (entity	R Tierno Galvan 10 Torre 3, Piso 6 Sala 602,
dissolved 9 January 2023)*	1070-274, Campo Ourique Lisbon, Lisbon, Portugal
CastleCo Limited	Aztec Group House, 11-15 Seaton Place, St Helier,
	Jersey, JE40QH4 0QH
HouseCo Limited	Aztec Group House, 11-15 Seaton Place, St Helier,
	Jersey, JE40QH4 0QH
CabinCo Limited	Aztec Group House, 11-15 Seaton Place, St Helier,
	Jersey, JE40QH4 0QH
CottageCo Limited	Aztec Group House, 11-15 Seaton Place, St Helier,
	Jersey, JE40QH4 0QH
Neilson Cobbold Client Nominees Ltd	Port of Liverpool Building, Pier Head, Liverpool L3
	1NW
Rathbone Nominees Limited	Port of Liverpool Building, Pier Head, Liverpool L3
	1NW
Investec Wealth & Investment Limited	30 Gresham Street, London, England, EC2V 7QN
Bell Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Investment Administration Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
R.& R. Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Tudor Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Carr PEP Nominees Limited	30 Gresham Street, London, England, EC2V 7QN

45 INVESTMENT IN SUBSIDIARIES CONTINUED

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218RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

Subsidiary undertaking	Registered office
Ferlim Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Murray Asset Management UK Limited	30 Gresham Street, London, England, EC2V 7QN
Castle Street Nominees UK Limited	30 Gresham Street, London, England, EC2V 7QN
Murray Asset Nominees UK Limited	30 Gresham Street, London, England, EC2V 7QN
Click Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
PEP Services (Nominees) Limited	30 Gresham Street, London, England, EC2V 7QN
Murray Asset Management Limited	Quartermile, 15 Lauriston Place, Edinburgh,
	Scotland, EH39E, EH3 9EN
Murray Investment Management Limited	Quartermile One, Lauriston Place, Edinburgh,
	Scotland, EH39E, EH3 9EN
Murray Asset Nominees Limited	Quartermile One, 15 Lauriston Place, Edinburgh,
	Scotland, EH39E, EH3 9EN
Spring Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Anston Trustees Limited	30 Gresham Street, London, England, EC2V 7QN
Carr Investment Services Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Investec Wealth & Investment Trustees Limited	30 Gresham Street, London, England, EC2V 7QN
Rensburg Client Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Scarwood Nominees Limited	30 Gresham Street, London, England, EC2V 7QN
Castle Street Nominees Limited	Quartermile One, Lauriston Place, Edinburgh,
	Scotland, EH39E, EH3 9EN
Hero Nominees Limited	Glategny Court, Glategny Esplanade, St Peter Port,
	Guernsey, GY11Y1 1WR
Investec Wealth & Investment (Channel Islands)	Glategny Court, Glategny Esplanade, St Peter Port,
Limited	Guernsey, GY11Y1 1WR
Torch Nominees Limited	Glategny Court, Glategny Esplanade, St Peter Port,
	Guernsey, GY11Y1 1WR

The company owns, directly or indirectly, 100% of the ordinary share capital of all subsidiary

undertakings.

46 OTHER INVESTMENTS

FAIR VALUE THROUGH PROFIT OR LOSS SECURITIES

2023

£m

2022

£m

Equity securities:

— listed

– 81

As described in note 37 of the consolidated financial statements, fair value through profit or loss

securities includes direct holdings in equity securities. The group previously owned units in

collectives managed by Rathbones Asset Management Limited (valued at 31 December 2022:

£81million). These assets were used to hedge the Group’s exposure to deferred remuneration

schemes for employees of unit trusts. These assets were sold during the period.

47 TRADE AND OTHER RECEIVABLES

2023

£m

2022

£m

Prepayments and other receivables 6.8 42

Amounts owed by group undertakings

136.8 1147

143.6 1189

Current

143.6 1189

Amounts owed by Group undertakings do not have specific repayment dates but are on demand and

are paid down periodically as trading requires.

45 INVESTMENT IN SUBSIDIARIES CONTINUED

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219RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

48 RIGHTOFUSE ASSETS

Property

£m

Motor vehicles

and equipment

£m

Total

£m

Cost

At 1 January 2022 563 04 567

Additions 34 − 34

Disposals (08) − (08)

Other movements (29) − (29)

At 1 January 2023

56.0 0.4 56.4

Additions 1.9 – 1.9

Disposals – – –

Other movements (2.6) – (2.6)

At 31 December 2023 55.3 0.4 55.7

Depreciation and impairment

1 January 2022 138 − 138

Charge for the year 49 01 50

Disposals (07) − (07)

At 1 January 2023

18.0 0.1 18.1

Charge for the year 4.8 0.1 4.9

Disposals (0.5) – (0.5)

At 31 December 2023 22.3 0.2 22.5

Carrying amount at 31 December 2023 33.0 0.2 33.2

Carrying amount at 31 December 2022 380 02 382

Carrying amount at 1 January 2022 424 04 428

During the year, where there was an expectation of the company vacating its properties prior to their

respective lease termination dates, the useful lives of the right-of-use assets were revised, and the

assets were reviewed for impairment. The company subsequently recognised impairment charges of

£21m and accelerated depreciation of £02m in the year.

49 DEFERRED TAX

The UK Government legislated in the Finance Act 2021 to increase the UK corporation tax rate to

250% from 190% on 1 April 2023. This has been reflected in the deferred tax calculations. Deferred

income taxes are calculated on all temporary differences under the liability method using the rate

expected to apply when the relevant timing differences are forecast to unwind.

The movement on the deferred tax account is as follows:

Pensions

£m

Share-based

payments

£m

Staff-related

costs

£m

Fair value

through

profit or loss

£m

Total

£m

As at 1 January 2023 (2.4) 12.1 0.1 (0.2) 9.6

Recognised in profit or loss in

respect of:

— current year (0.8) (2.5) 0.1 0.2 (3.0)

— prior year – – 0.2 – 0.2

— change in rate (0.1) – – – (0.1)

Total recognised in profit

or loss

(0.9) (2.5) 0.3 0.2 (2.9)

Recognised in other comprehensive

income in respect of:

— current year

1.4 – – – 1.4

— prior year – – – – –

— change in rate 0.1 – – – 0.1

Total recognised in other

comprehensive income

1.5 – – – 1.5

Recognised in equity in respect of:

— current year

– (0.7) – – (0.7)

— prior year – – – – –

— change in rate – – – – –

Total recognised in equity – (0.7) – – (0.7)

As at 31 December 2023

(1.8) 8.9 0.4 – 7.5

Deferred tax assets – 8.9 0.4 – 9.3

Deferred tax liabilities (1.8) – – – (1.8)

As at 31 December 2023 (1.8) 8.9 0.4 – 7.5

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220RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

49 DEFERRED TAX CONTINUED

Pensions

£m

Share-based

payments

£m

Staff-related

costs

£m

Fair value

through

profit or loss

£m

Total

£m

As at 1 January 2022 (23) 97 01 (03) 71

Recognised in profit or loss in

respect of:

— current year (08) 09 (01) 02 02

— prior year − 01 − − 01

— change in rate (26) 02 − − (25)

Total recognised in profit or loss (34) 12 (01) 01 (21)

Recognised in other comprehensive

income in respect of:

— current year 13 − − − 13

— prior year − − − − −

— change in rate 20 − − − 20

Total recognised in other

comprehensive income 33 − − − 33

Recognised in equity in respect of:

— current year − 12 − − 12

— prior year − − − − −

— change in rate − − − − −

Total recognised in equity − 12 − − 12

As at 31 December 2022 (24) 121 01 (02) 96

Deferred tax assets − 121 01 − 121

Deferred tax liabilities (24) − − (02) (25)

As at 31 December 2022 (24) 121 01 (02) 96

£04 million of current tax on share-based payments was charged to equity during the year (2022:

credit of £01 million).

50 TRADE AND OTHER PAYABLES

2023

£m

2022

£m

Trade creditors 1.7 17

Accruals and other creditors

83.7 847

Amounts owed to group undertakings

– 182

Other taxes and social security costs

10.0 94

95.4 1140

The fair value of trade and other payables is not materially different from their carrying amount.

51 LEASE LIABILITIES

Maturity analysis

2023

£m

2022

£m

Less than one year 5.3 48

One to five years

18.7 191

More than five years

21.7 258

Lease liabilities at 31 December

45.7 497

Current

5.3 48

Non-current

40.4 449

45.7 497

The total cash outflow for Company leases during the year was £76 million (2022: £78 million).

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221RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

52 PROVISIONS

Deferred, variable

costs to acquire

client relationship

intangibles

£m

Legal and

compensation

£m

Property-

£m

Total

£m

As at 1 January 2022 85 01 45 131

Charged to profit or loss − − 09 09

Unused amount credited to profit

or loss − − − −

Net charge to profit or loss − − 09 09

Other movements 10 − − 10

Utilised/paid during the year (52) − − (52)

At 31 December 2022 43 01 54 98

Charged to profit or loss − − − −

Unused amount credited to profit

or loss − − − −

Net credit to profit or loss − − − −

Other movements 26 − − 26

Utilised/paid during the year (23) − − (23)

As at 31 December 2023

4.6 0.1 5.4 10.1

Payable within 1 year

4.1 0.1 0.5 4.7

Payable after 1 year 0.5 – 4.9 5.4

4.6 0.1 5.4 10.1

Other movements in provisions relate to deferred payments to investment managers and third

parties for the introduction of client relationships, which have been previously capitalised.

Property-related provisions of £53 million relate to dilapidation provisions expected to arise on

leasehold premises held by the group (2022: £53 million). Dilapidation provisions are calculated

using a discounted cash flow model.

In 2023 the company did not utilise the property provision (2022: £nil). The impact of discounting

led to a credit of £nil (2022: additional charge of £09 million) being recognised during the year.

Provisions payable after one year are expected to be settled within four years of the balance sheet

date (2022: two years), except for the property-related provisions of £49 million (2022: £50 million),

which are expected to be settled within 11 years of the balance sheet date (2022: 11 years).

53 SUBORDINATED LOAN NOTES

2023

£m

2022

£m

Subordinated loan notes

— face value

40.0 400

— carrying value

39.9 399

Rathbones Group Plc holds £399 million of 10-year tier 2 notes with a call option in October 2026

and annually thereafter. The Issuer requires the group’s subsidiaries to comply with all laws and

governmental rules or regulations to which they are subject. Interest is payable at a fixed rate of

5642% per annum until the first call option date and at a fixed rate of 4893% over Compounded

Daily SONIA thereafter. Legal fees of £01 million were incurred in issuing the notes, which have

been accounted for in the carrying value of amortised cost.

An interest expense of £23 million (2022: £23 million) was recognised in the year.

54 LONGTERM EMPLOYEE BENEFITS

Details of the defined benefit pension schemes operated by the company are provided in note 29 to

the consolidated financial statements.

55 SHARE CAPITAL, OWN SHARES AND SHAREBASED PAYMENTS

Details of the share capital of the company and ordinary shares held by the company together with

changes thereto are provided in notes 30 and 31 to the consolidated financial statements. Details of

options on the company’s shares and share-based payments are set out in note 32 to the consolidated

financial statements.

56 FINANCIAL INSTRUMENTS

The company’s risk management policies and procedures are integrated with the wider Rathbones

group’s risk management process. The Rathbones group has identified the risks arising from all of its

activities, including those of the company, and has established policies and procedures to manage

these items in accordance with its risk appetite. The company categorises its financial risks into the

following primary areas:

(i) credit risk

(ii) liquidity risk

(iii) market risk (which includes fair value interest rate risk, cash flow interest rate risk,

foreignexchange risk and price risk); and

(iv) pension risk.

The company’s exposures to pension risk are set out in note 29 to the consolidated financial

statements.

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222RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

The sections below outline the group risk appetite, as applicable to the company, and explain how the

company defines and manages each category of financial risk.

The company’s financial risk management policies are designed to identify and analyse the financial

risks that the company faces, to set appropriate risk tolerances, limits and controls, and to monitor the

financial risks and adherence to limits by means of reliable and up-to-date information systems. The

company regularly reviews its financial risk management policies and systems to reflect changes in

the business and the wider industry.

The company’s overall strategy and policies for monitoring and management of financial risk are set

by the board of directors. The board has embedded risk management within the business through

the executive committee and senior management.

(i) CREDIT RISK

The company takes on exposure to credit risk, which is the risk that a counterparty will be unable to

pay amounts in full when due, through its trading activities. The principal sources of credit risk arise

from depositing funds with banks and through providing long-term and working capital financing

forsubsidiaries.

The company’s financial assets are categorised as follows.

Trade and other receivables

Trade and other receivables relate to amounts placed with subsidiaries and staff advances.

The collection and ageing of trade and other receivables are reviewed on a periodic basis

bymanagement.

The company places surplus funds with its banking subsidiary, which operates under the group’s

credit risk management policies. Group policy requires that funds are placed with a range of high-

quality financial institutions. Investments are spread to avoid excessive exposure to any individual

counterparty.

For the purposes of financial reporting the company categorises its exposures based on the long-term

ratings awarded to counterparties by Fitch, Moody’s or S&P.

Cash and cash equivalents (balances at banks)

The company has exposure to financial institutions through its bank deposits (reported within

cashequivalents).

Maximum exposure to credit risk

2023

£m

2022

£m

Trade and other receivables:

— amounts owed by group undertakings

136.8 1147

— other financial assets

1.1 11

Balances at banks

16.3 566

154.2 1724

The above table represents the gross credit risk exposure of the company at 31 December 2023 and

2022, without taking account of any collateral held or other credit enhancements attached.

Trade and other receivables

No trade and other receivables have been written off or are credit-impaired at the reporting date.

Amounts owed by group undertakings do not have specific repayment dates and are paid down

periodically as trading requires.

Balances at banks

The credit quality of balances at banks is analysed below by reference to the long-term credit rating

awarded by Fitch, or equivalent rating by Moody’s or S&P, as at the balance sheet date.

2023

£m

2022

£m

A 7.6 45

Other

8.7 521

16.3 566

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223RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

(i) CREDIT RISK CONTINUED

£87 million of cash was held in a designated account with Rathbones Investment Management

Limited at 31 December 2023, which acts as the group’s treasury function and a licenced deposit

taker (2022: £521 million). The credit risk assessed for this balance at the year-end was ‘low’

Concentration of credit risk

The company has counterparty credit risk within its balances at banks in that the principal exposure is

to its banking subsidiary. The board sets and monitors the group policy for the management of group

funds, which includes the placement of funds with a range of high-quality financial institutions.

(a) Geographical sectors

The following table analyses the company’s credit exposures, at their carrying amounts, by

geographical region as at the balance sheet date. In this analysis, exposures are categorised based

on the country of domicile of the counterparty

At 31 December 2023

United

Kingdom

£m

Rest of

the World

£m

Total

£m

Trade and other receivables:

— amounts owed by group undertakings

135.8 1.0 136.8

— other financial assets 1.0 0.1 1.1

Balances at banks 16.3 – 16.3

153.1 1.1 154.2

At 31 December 2022

United

Kingdom

£m

Rest of

the World

£m

Total

£m

Trade and other receivables:

— amounts owed by group undertakings 1139 08 1147

— other financial assets 09 02 11

Balances at banks 566 − 566

1714 10 1724

At 31 December 2023, all rest of the world exposures were to counterparties based in Jersey, Japan

and the United States of America (2022: Jersey and the United States of America). At 31 December

2023, the group had exposure to the UK government through the holding of treasury bills (2022:

UKgovernment).

(b) Industry sectors

The company’s credit exposures at the balance sheet date, analysed by the primary industry

sectors in which our counterparties operate, were:

At 31 December 2023

Financial

institutions

£m

Clients and other

corporates

£m

Total

£m

Trade and other receivables:

— amounts owed by group undertakings

8.3 128.5 136.8

— other financial assets – 1.1 1.1

Balances at banks 16.3 – 16.3

24.6 129.6 154.2

At 31 December 2022

Financial

institutions

£m

Clients and other

corporates

£m

Total

£m

Trade and other receivables:

— amounts owed by group undertakings − 1147 1147

— other financial assets − 11 11

Balances at banks 566 − 566

566 1158 1724

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224RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

(ii) LIQUIDITY RISK

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The company

places its funds in short-term or demand facilities with financial institutions to ensure liquidity. The company has no bank loans (2022: £nil).

Non-derivative cash flows

The table below presents the undiscounted cash flows receivable and payable by the company on its non-derivative financial assets and liabilities by remaining contractual maturities at the balance

sheetdate.

At 31 December 2023

demand

£m

Not more than

3 months

£m

After 3 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After 5

years

£m

No fixed

maturity

date

£m

Total

£m

Trade and other receivables:

— amounts owed by group undertakings

136.8 – – – – – 136.8

— other financial assets – 0.2 0.8 0.2 – – 1.2

Balances at banks 16.3 – – – – – 16.3

Cash flows arising from financial assets 153.1 0.2 0.8 0.2 – – 154.3

Trade and other payables:

— amounts owed to group undertakings

– – – – – – –

— subordinated loan notes – – 2.3 44.5 – – 46.8

— lease liabilities – 2.0 5.9 20.6 31.9 – 60.4

— other financial liabilities 0.2 11.3 0.9 3.0 3.7 – 19.1

Cash flows arising from financial liabilities 0.2 13.3 9.1 68.1 35.6 – 126.3

Net liquidity gap 152.9 (13.1) (8.3) (6 7.9) (35.6) – 28.0

Cumulative net liquidity gap 152.9 139.8 131.5 63.6 28.0 28.0

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NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

(ii) LIQUIDITY RISK CONTINUED

At 31 December 2022

demand

£m

Not more than

3 months

£m

After 3 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After 5

years

£m

No fixed

maturity

date

£m

Total

£m

Trade and other receivables:

— amounts owed by group undertakings 1147 − − − − − 1147

— other financial assets − 02 07 02 − − 11

Balances at banks 566 − − − − − 566

Cash flows arising from financial assets 1713 02 07 02 − − 1724

Trade and other payables:

— amounts owed to group undertakings 182 − − − − − 182

— subordinated loan notes 22 468 490

— lease liabilities − 19 57 217 377 − 670

— other financial liabilities 02 64 02 51 43 − 162

Cash flows arising from financial liabilities 184 83 81 736 420 − 1504

Net liquidity gap 1529 (81) ( 74) (734) (420) − 220

Cumulative net liquidity gap 1529 1448 1374 640 220 220

Included within trade and other payables disclosed above are balances that are repayable on demand or that do not have a contractual maturity date, which historical experience shows are unlikely to be

called in the short term.

The company holds £nil of equity investments (2022: £81 million) which are subject to liquidity risk but are not included in the table above. These assets are held as fair value through profit or loss securities

and have no fixed maturity date; cash flows arise from receipt of dividends or through sale of the assets.

STRATEGIC

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226RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

(ii) LIQUIDITY RISK CONTINUED

Total liquidity requirement

At 31 December 2023

demand

£m

Not more

than 3 months

£m

After 3 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After

5 years

£m

Total

£m

Cash flows arising from financial liabilities 0.2 13.3 9.1 68.1 35.6 126.3

Total off-balance-sheet items – – – – – –

Total liquidity requirement 0.2 13.3 9.1 68.1 35.6 126.3

At 31 December 2022

demand

£m

Not more than

3 months

£m

After 3 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After 5

years

£m

Total

£m

Cash flows arising from financial liabilities 184 83 82 735 420 1504

Total off-balance-sheet items − − − − − −

Total liquidity requirement 184 83 82 735 420 1504

(iii) MARKET RISK

Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a

financial instrument will fluctuate because of changes in market interest rates.

The company’s principal exposure to cash flow interest rate risk arises from the mismatch between the repricing of its financial assets and liabilities.

The table below shows the repricing profile of the company’s financial assets and liabilities, stated at their carrying amounts, categorised by the earlier of contractual repricing or maturity dates.

At 31 December 2023

Not more

than 3 months

£m

After 3 months

but not more

than 6 months

£m

After 6 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After

5 years

£m

Non-interest

-bearing

£m

Total

£m

Assets

Other investments:

— equity securities – – – – – – –

Trade and other receivables:

— amounts owed by group undertakings – – – – – 136.8 136.8

— other financial assets 0.5 – – – – 0.6 1.1

Balances at banks 16.3 – – – – – 16.3

Total financial assets 16.8 – – – – 137.4 154.2

STRATEGIC

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227RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

At 31 December 2023

Not more

than 3 months

£m

After 3 months

but not more

than 6 months

£m

After 6 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After

5 years

£m

Non-interest

-bearing

£m

Total

£m

Liabilities

Trade and other payables:

— amounts owed to group undertakings – – – – – – –

— subordinated loan notes – – – 39.9 – – 39.9

— other financial liabilities 1.3 1.3 2.7 18.7 21.7 17.6 63.3

Total financial liabilities 1.3 1.3 2.7 58.6 21.7 17.6 103.2

Interest rate repricing gap 15.5 (1.3) (2.7) (58.6) (21.7) 119.8 51.0

At 31 December 2022

Not more

than 3 months

£m

After 3 months

but not more

than 6 months

£m

After 6 months

but not more

than 1 year

£m

After 1 year

but not more

than 5 years

£m

After

5 years

£m

Non-interest

-bearing

£m

Total

£m

Assets

Other investments:

— equity securities − − − − − 81 81

Trade and other receivables:

— amounts owed by group undertakings − − − − − 1147 1147

— other financial assets 06 − − − − 05 11

Balances at banks 565 − − − − − 565

Total financial assets 571 − − − − 1233 1804

Liabilities

Trade and other payables:

— amounts owed to group undertakings − − − − − 182 182

— subordinated loan notes − − − 399 − − 399

— other financial liabilities 11 11 25 192 258 147 644

Total financial liabilities 11 11 25 591 258 329 1225

Interest rate repricing gap 560 (11) (25) (591) (258) 904 579

A 2% parallel increase or decrease in the sterling yield curve would have no impact on profit after tax or equity (2022: no impact).

56 FINANCIAL INSTRUMENTS CONTINUED

(iii) MARKET RISK CONTINUED

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228RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

(iii) MARKET RISK CONTINUED

The company has assessed the impact of climate change on the carrying amount of its financial

assets and liabilities at year-end, and considers there to be no material impact.

Foreign exchange risk

The company does not have any material exposure to transactional foreign exchange risk. The table

below summarises the company’s exposure to foreign currency translation risk at 31 December

2023. Included in the table are the company’s financial assets and liabilities, at carrying amounts,

categorised by currency.

At 31 December 2023

Sterling

£m

US dollar

£m

Euro

£m

Total

£m

Assets

Other investments:

— equity securities – – – –

Trade and other receivables:

— amounts owed by group undertakings 136.8 – – 136.8

— other financial assets 1.0 0.1 – 1.1

Balances at banks 16.3 – – 16.3

Total financial assets 154.1 0.1 – 154.2

Liabilities

Trade and other payables:

— amounts owed to group undertakings – – – –

— subordinated loan notes 39.9 – – 39.9

— other financial liabilities 63.2 0.1 – 63.3

Total financial liabilities 103.1 0.1 – 103.2

Net on-balance-sheet position 51.0 – – 51.0

At 31 December 2022

Sterling

£m

US dollar

£m

Euro

£m

Total

£m

Assets

Other investments:

— equity securities 81 − − 81

Trade and other receivables:

— amounts owed by group undertakings 1147 − − 1147

— other financial assets 09 01 − 10

Balances at banks 566 − − 566

Total financial assets 1803 01 − 1804

Liabilities

Trade and other payables:

— amounts owed to group undertakings 182 − − 182

— subordinated loan notes 399 − − 399

— other financial liabilities 642 02 − 644

Total financial liabilities 1223 02 − 1225

Net on-balance-sheet position 579 − − 5 79

A 10% weakening of the US dollar against sterling would have reduced equity and profit after tax

by£nil in 2023 (2022: £nil). A 10% strengthening of the US dollar would have had an equal and

opposite effect. This analysis assumes that all other variables, in particular other exchange rates,

remainconstant.

Price risk

The group’s exposure to price risk, all of which is through the company’s holdings of equity

investment securities, is described in note 33.

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229RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

56 FINANCIAL INSTRUMENTS CONTINUED

(iii) MARKET RISK CONTINUED

Fair values

The table below analyses financial instruments measured at fair value into a fair value hierarchy

based on the valuation technique used to determine the fair value:

— Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

— Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or

liability, either directly or indirectly.

— Level 3: inputs for the asset or liability that are not based on observable market data.

At 31 December 2023

Level 1

£m

Level 2

£m

Level 3

£m

Total

£m

Assets

Fair value through profit or loss:

— equity securities

– – – –

At 31 December 2022

Level 1

£m

Level 2

£m

Level 3

£m

Total

£m

Assets

Fair value through profit or loss:

— equity securities 81 − − 81

81 − − 81

The company recognises transfers between levels of the fair value hierarchy at the end of the

reporting period during which the change has occurred. There have been no transfers between levels

during the year (2022: none).

Details of the methods and assumptions used to determine the fair values of the financial assets in

the above table, along with how reasonably possible changes to the assumptions affect these fair

values, are provided in note 33 to the consolidated financial statements.

The fair values of the company’s financial assets and liabilities are not materially different from their

carrying values, with the exception of equity investments in subsidiaries, which are carried at

historical cost (note 45).

57 CAPITAL MANAGEMENT

The company’s objectives when managing capital are to:

— safeguard the company’s ability to continue as a going concern so that it can continue to provide

returns for shareholders and benefits for other stakeholders

— maintain a strong capital base to support the development of its business

For monitoring purposes, the company defines capital as distributable reserves (see note 44). The

company monitors the level of distributable reserves on a monthly basis and compares this to

forecast dividends. Capital is distributed to the company from operating subsidiaries on a timely

basis to ensure sufficient capital is maintained. The board of directors monitors the level of capital

held in relation to forecast performance, dividend payments and wider plans for the business,

although formal quantitative targets are not set.

There were no changes in the company’s approach to capital management during the year.

58 CONTINGENT LIABILITIES AND COMMITMENTS

The company had no contingent liabilities or commitments at the year-end (2022: £nil).

59 RELATED PARTY TRANSACTIONS

Rathbones Group Plc is considered to be the ultimate controlling party.

TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

The remuneration of the key management personnel of the company, who are defined as the

company’s directors and other members of senior management who are responsible for planning,

directing and controlling the activities of the company, is set out below.

2023

£m

2022

£m

Short-term employee benefits 2.3 17

Other long-term benefits

0.1 −

Share-based payments

0.7 01

3.1 18

Dividends totalling £03 million were paid in the year (2022: £02 million) in respect of ordinary

shares held by key management personnel and their close family members.

All amounts outstanding with related parties are unsecured and will be settled in cash. No

guarantees have been given or received. No provisions have been made for doubtful debts in respect

of the amounts owed by related parties. All transactions were made on normal business terms.

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230RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

59 RELATED PARTY TRANSACTIONS CONTINUED

OTHER RELATED PARTY TRANSACTIONS

During the year, the company entered into the following transactions with its subsidiaries:

2023 2022

Receivable

£m

Payable

£m

Receivable

£m

Payable

£m

Interest 3.8 – 56 −

Charges for management services

68.1 – 580 −

Dividends received

92.0 – 500 −

163.9 – 1136 −

The company’s balances with fellow group companies at 31 December 2023 are set out in notes 47

and 50.

The company’s transactions with the pension funds are described in note 54. At 31 December 2023,

no amounts were due from the pension schemes (2022: £nil).

All transactions and outstanding balances with fellow group companies are priced on an arm’s-length

basis and are to be settled in cash. None of the balances are secured and no provisions have been

made for doubtful debts for any amounts due from fellow group companies.

60 CASH AND CASH EQUIVALENTS

For the purposes of the company statement of cash flows, cash and cash equivalents comprise the

following balances with less than three months until maturity from the date of acquisition:

2023

£m

2022

£m

Cash at bank (excluding amounts held by employee benefit trust) 16.3 566

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231RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

NOTES TO THE COMPANY STATEMENTS CONTINUED

60 CASH AND CASH EQUIVALENTS CONTINUED

A reconciliation of the movements of financing liabilities and equity to cash flows arising from financing activities is as follows:

Subordinated

loan notes

£m

Lease

liabilities

£m

Liabilities from

financing

activities

£m

Share capital/

premium

£m

Reserves

£m

Retained

earnings

£m

Total

equity

£m

Total

£m

At 1 January 2023 39.9 49.7 89.6 313.2 ( 7.4) 143.1 448.9 538.5

Changes from financing cash flows

Proceeds from issue of share capital

– – – 2.3 (2.3) – – –

Payments for share repurchases – – – – (16.0) – (16.0) (16.0)

Dividends paid – – – – – (71.4) (71.4) (71.4)

Interest charge (2.3) (2.7) (5.0) – – – – (5.0)

Payment for lease liabilities – (4.7) (4.7) – – – – (4.7)

Total financing cash flows (2.3) ( 7.4) (9.7) 2.3 (18.3) (71.4) (8 7.4) (9 7.1)

Total non-cash movements 2.3 3.4 5.7 2.2 762.6 63.6 828.4 834.1

At 31 December 2023 39.9 45.7 85.6 31 7.7 736.9 135.3 1,189.9 1,275.5

Subordinated

loan notes

£m

Lease

liabilities

£m

Liabilities from

financing

activities

£m

Share capital/

premium

£m

Reserves

£m

Retained

earnings

£m

Total

equity

£m

Total

£m

At 1 January 2022 39.9 53.9 93.8 294.1 8.5 143.4 446.0 539.8

Changes from financing cash flows

Proceeds from issue of share capital − − − 93 − − 93 93

Payments for share repurchases − − − − (186) − (186) (186)

Dividends paid − − − − − (486) (486) (486)

Interest charge (23) (30) (53) − − − − (53)

Payment for lease liabilities − ( 78 ) ( 7 8) − − − − (78)

Total financing cash flows (23) (108) (131) 93 (186) (486) (579) (710)

Total non-cash movements 22 66 88 98 27 483 608 696

At 31 December 2022

39.9 49.7 89.6 313.2 ( 7.4) 143.1 448.9 538.5

61 EVENTS AFTER THE BALANCE SHEET DATE

There have been no material events occurring between the balance sheet date and the date of signing this report.

STRATEGIC

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232RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FURTHER

INFORMATION

234 Five-year record

234 Corporate information

FURTHER

INFORMATION

233RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FINANCIAL

STATEMENTS

STRATEGIC

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233RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

FURTHER INFORMATION

FIVEYEAR RECORD

2023

£’000

2022

£’000

2021

£’000

2020

£’000

2019

£’000

Operating income (and underlying operating income)

571.1 4559 4359 3661 3481

Underlying profit before tax

127.1 9 71 1207 925 887

Profit before tax

57.6 641 950 438 397

Profit after tax

37. 5 490 752 267 269

Equity dividends paid and proposed

62.9 493 495 387 377

Basic earnings per share

52.6p 836p 1335p 496p 503p

Diluted earnings per share

50.8p 816p 1293p 476p 487p

Underlying earnings per share

135.8p 1308p 1722p 1333p 1328p

Dividends per ordinary share

87.0 p 840p 810p 720p 700p

Equity shareholders' funds

1,350.1 6348 6233 5138 4854

Total funds under management and administration

£105.3bn £602bn £682bn £547bn £504bn

1. A reconciliation between the underlying measure and its closest IFRS equivalent for the current year and the prior year is shown in table 3 on page 34

2. Data excludes IW&I

CORPORATE INFORMATION

Wealth management Asset management

Principal trading names

Rathbones Investment Management

Rathbones Investment Management International

Greenbank Investments

Rathbones Trust Company

Rathbones Legal Services

Vision Independent Financial Planning

Castle Investment Solutions

Saunderson House

Investec Wealth & Investment

Investec Wealth & Investment (Channel Islands)

Murray Asset Management UK

Rathbones Asset Management

(formerly Rathbone Unit Trust Management)

Offices 23 2

Websites

rathbones.com

rathbones.com/international

greenbankinvestments.com

rathbones.com/financial-planning

rathbonesam.com

investec.com/en_gb/wealth

STRATEGIC

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234RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

REGISTERED OFFICE

Rathbones Group Plc

8 Finsbury Circus

London

EC2M 7A Z

Company No. 01000403

www.rathbones.com

COMPANY SECRETARY

A Johnson

ali.johnson@rathbones.com

REGISTRARS AND TRANSFER OFFICE

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex

BN996DA

www.equiniti.com

UK MAINLAND CORRESPONDENCE

Rathbones

PO Box 1965

Liverpool

L693HU

OUR OFFICES

To find your local office please visit our website.

www.rathbones.com

FURTHER INFORMATION CONTINUED

235RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

236RATHBONES GROUP PLC REPORT & ACCOUNTS 2023

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Rathbones

8 Finsbury Circus

London

EC2M 7AZ

+44 (0)20 7399 0000

rathbones.com