Strategic Report

General Information
The following section summarises the principal risks and uncertainties that impact both the Group and the market in which we operate. The Board is responsible for assessing the principal risks and these are monitored on a regular basis by the Risk Committee under the Chairmanship of the Group Head of Risk.

Against each of the principal risks consideration is given to the Group’s exposure and the extent to which the risk can be mitigated. There have been no material changes in the principal risks to the Group during the year. However, political uncertainties caused by the continuing Brexit negotiations and the minority government in Westminster have, in the opinion of the Risk Committee, increased the likelihood and impact of regulatory, legislative and tax changes to the financial services sector and the economy as a whole.

The Board considers risk within four categories: – Conduct, Credit, Market and Operational. The Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s financial performance and its reputation arising from these risk areas.

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and to maintain an appropriate capital structure to reduce the cost of capital. The Group monitors capital by maintaining or adjusting the capital structure by managing the level of dividends paid to shareholders, issuing new shares and unsecured securities or selling assets to maintain financial resources. The capital employed by the Group is composed of equity attributable to the shareholders and long-term unsecured corporate bonds, as detailed in the Statement of Changes in Equity.

The Key financial and non financial risks identified by the Board and the measures taken to mitigate their impact


Key performance indicators
The directors consider the key performance indicators (“KPIs”) for the Group to be:

  • Revenue – this is total income (excluding VAT) from all revenue streams;
  • Gross margin – this is the revenue generated by the Group after fees paid to its independent financial advisors and other direct costs of sale;
  • Underlying EBITDA margin – this is profit generated from the Group’s operating activities before any financing income or costs, taxation, non-cash share-based payments, depreciation and amortisation as a proportion of revenue;
  • Adjusted profit before tax – profit before taxation, non-cash share-based payments, depreciation and amortisation of intangible assets; and
  • Adjusted EPS – total comprehensive income for the year, net of tax, attributable to equity holders of the Group, adjusted to add back acquisition costs expensed under IFRS 3 (Revised) and the amortisation of intangible assets, divided by the number of ordinary shares in issue;

Key performance indicators
The directors consider the group’s non-financial key performance indicators (“KPIs”) for the Group to be:

  • Advice Quality Reviews – review of the suitability of financial planning and investment advice provided to our client base;
  • File quality – measuring the quality and integrity of documentation ensuring that it provides sufficient defence against future financial and regulatory scrutiny and represents the quality of advice provided;
  • Complaints – measuring the volume of regulated advice and service complaints received within any given period;
  • TCF surveys – qualitative information sought from clients who engage in new/repeat advice process; and
  • Breaches – measuring process failures throughout the group and thematic evidence produced to highlight weaknesses for action.

Directors during the financial year

John Wheatley, Alan Hudson, Paul Wright, Susan Lewis, Mark Chambers, Austin Broad and Alexis Larvin were directors of the company throughout the financial year.

Director’s Report

Some strategic considerations are documented within the Directors’ Report on pages 22-23.

Full disclosure of information
Each of the Directors at the time of this report confirm that so far as they are aware, there is no relevant audit information of which the company’s auditor is unaware and they have taken all appropriate steps to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

Approved by the board

John Wheatley



29 January 2018

Annual Report

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