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RNS Number : 1954Z abrdn PLC 04 March 2025
abrdn plc
Full Year Results 2024
Part 2 of 7
Growing in Wealth, Repositioning Investments
abrdn plc Annual report and accounts 2024
Our purpose
To enable our clients to be better investors.
Our ambition
To be the UK's leading Wealth & Investments group:
- Fast growing direct and advised wealth platforms.
- A specialist asset manager with strength in areas of market growth.
- Driven by excellent client service, technology and talent.
This Annual report and accounts 2024 for abrdn plc, and the Strategic report
and financial highlights 2024 are published on our website at
www.abrdn.com/annualreport
(APM) Certain measures such as adjusted operating profit, adjusted profit before
tax, adjusted capital generation and net capital generation, are not defined
under International Financial Reporting Standards (IFRS) and are therefore
termed alternative performance measures (APMs). APMs should be read together
with the Group's consolidated income statement, consolidated statement of
financial position and consolidated statement of cash flows, which are
presented in the Group financial statements section of this report. Further
details on APMs are included in Supplementary information.
See Supplementary information for details on assets under management and
administration (AUMA), net flows and the investment performance calculation.
Net flows on the highlights page excludes liquidity flows as these are
volatile and lower margin.
Sustainability - Environmental transition
Highlights
Adjusted operating profit (APM)
£255m
2023: £249m
IFRS profit/(loss) before tax
£251m
2023: £(6)m
Full year dividend per share
14.6p
2023: 14.6p
Investment performance(1)
(% of AUM performing)
1 year 3 years
77% 60%
2023: 55% 2023: 51%
Net flows (excluding liquidity)
£6.1bn outflow
2023: £13.9bn outflow
MSCI ESG rating
AA
2023: AA
1. The scope of the investment performance calculation has been
extended to cover all funds that aim to track or outperform a benchmark, with
certain assets excluded where this measure of performance is not appropriate
or expected. 2023 comparatives have been restated. Further details about the
calculation of investment performance and the change in scope are included in
the Supplementary information section.
Contents
Strategic report
At a glance 2
Our strategic priorities 4
Chairman's statement 12
Chief Executive Officer's review 16
Our business model 20
Performance overview 22
Our businesses 24
Sustainability 42
Key performance indicators 64
Chief Financial Officer's overview 66
Risk management 82
Governance
Board of Directors 88
Corporate governance statement 92
Audit Committee report 105
Risk and Capital Committee report 114
Nomination and Governance Committee report 118
Directors' remuneration report 122
Directors' report 142
Statement of Directors' responsibilities 149
Financial information
Independent auditor's report 152
Group financial statements 169
Company financial statements 270
Supplementary information 286
Other information
Sustainability - independent limited assurance report 300
Sustainability reporting criteria 302
Glossary 306
Shareholder information 310
Forward-looking statements 311
Contact us IBC
We are a Wealth & Investments group
UK savings and wealth platforms Specialist asset management
interactive investor (ii) Adviser Investments
As the UK's second-largest direct-to-consumer investment platform by AUA and Our Adviser business, the UK's second-largest advised platform by AUA(2), Our capabilities in our investments business are built on the strength of our
number one by net flows(1), ii offers a self-directed investing and trading provides financial planning solutions and technology for UK financial advisers insight - generated from wide- ranging research, worldwide investment
platform that enables individuals in the UK to plan, save and invest in the which enables them to create value for their businesses and their clients. expertise and local market knowledge.
way that works for them.
Our clients:
Our clients:
Financial advisers Our clients:
Individuals that are:
- Insurance companies
- Lower confidence investors
- Sovereign wealth funds
- Self-directed investors
- Independent wealth managers
- Active/expert investors
- Individuals
- Pension funds
- Platforms
- Banks
Family offices
Adjusted operating profit Adjusted operating profit Adjusted operating profit
£116m (2023: £114m) £126m (2023: £118m) £61m (2023: £50m)
AUMA AUMA AUM
£77.5bn (2023: £66.0bn) £75.2bn (2023: £73.5bn) £369.7bn (2023: £366.7bn)
Cost/income ratio Cost/income ratio Cost/income ratio
58% (2023: 60%) 47% (2023: 47%) 92% (2023: 94%)
Adjusted operating profit
£126m (2023: £118m)
AUMA
£75.2bn (2023: £73.5bn)
Cost/income ratio
47% (2023: 47%)
Adjusted operating profit
£61m (2023: £50m)
AUM
£369.7bn (2023: £366.7bn)
Cost/income ratio
92% (2023: 94%)
Read more about our three businesses on pages 24 to 36. Overall performance
summary is included on page 76.
1. Source: Fundscape, Direct Matters Q4 2024 report.
2. Source: Fundscape, The Platform Report Q3 2024. Excludes Curtis Banks AUA.
Well-positioned for market growth opportunities
We connect investors to the expertise, tools, and solutions they need to grow
and manage their wealth with confidence.
Across our businesses, we focus on providing leading platforms, specialist
investments, and long-term value - unlocking opportunities and outcomes that
matter.
Market Business Size of opportunity Where we can win
opportunities
Intergenerational wealth transfer ii, Adviser UK: Transfer of c.£5.5tn expected over the next 25 years(1) Dynamic retirement solutions
Increasing personal responsibility for savings ii, Adviser UK: 35% of adults (19.1m) hold investments, up 6 ppts from 2018(2) Direct and advised investing
Growing savings & advice gap ii, Adviser, Investments UK: 'Savings and advice gap' of over 20 million people(3) Affordable, tailored guidance and execution. Increasing advisers' capacity.
Managed solutions
More complex client needs & outcomes ii, Adviser, Investments 11% p.a. growth of public market active specialties(4) Customised services and products. Higher value specialist active strategies
Growing Private Markets demand with increasing accessibility Investments 10% p.a. growth(5) Existing scale, new products and growth in new channels
Ongoing energy transition Investments 11% p.a. growth in investment in low-carbon energy transition(6) Real Assets and sustainability
Note: All opportunities are global unless otherwise stated.
Source: (1) Kings Court Trust. (2) Platforum. (3) Boring Money and Yorkshire
Building Society. (4) Broadridge. (5) BCG. (6) Bloomberg.
Our strategic priorities
A clear roadmap focusing on three key strategic priorities to drive improved
performance
Transform performance
- Drive sustainable, profitable growth.
- Deliver a significant uplift in efficiency and profitability in Investments.
- Improve net capital generation to support shareholder returns.
Read more on pages 6-7.
Improve client experience
- Win in UK wealth and with UK & international investment clients through
continued focus on meeting customer needs.
- Maintain focus on improving investment performance.
- Continue to innovate and simplify.
Read more on pages 8-9.
Strengthen talent and culture
- Attract and retain the best people.
- Engage and motivate our colleagues.
- Streamline decision-making driven by the new Group Operating Committee.
Read more on pages 10-11.
Our strategic priorities will play a key role in delivering on our new
targets:
FY26 FY26
Adjusted operating profit Net capital
generation
>£300m c.£300m
interactive Adviser Investments
investor
Sustain efficient growth by building on our differentiated proposition and Return to net inflows by enhancing our proposition and delivering leading Step change in profitability by repositioning to areas of strength and
investing in the ii brand. client service. opportunity, and driving improved efficiency.
FY26 FY26 FY26
Customer growth Net promoter score(2) Investment performance
(3-years)
8% p.a. >40 >70%
Cost/AUMA ratio(1) Net inflows Adjusted operating profit
<20bps >£1bn >£100m
See page 70. for further details on the FY 2026 targets.
1. The cost/AUMA ratio is calculated as annualised adjusted operating expenses
divided by monthly average AUMA.
2. Average NPS for FY 2026.
Transform performance
We are driving transformation across the Group to improve efficiency and
deliver valued outcomes for all of our stakeholders.
Transforming to improve efficiency and profitability
In January 2024, we announced our cost transformation programme to deliver
increased efficiency across the Group. Over the financial year, we delivered
annualised cost savings of over £100m and aim to deliver at least £150m of
annualised cost savings by the end of 2025. Our results show that we are
already beginning to deliver performance improvements, although we have more
work to do in Investments, which is the programme's main focus.
Each business has focused on transforming its performance. In 2024,
interactive investor delivered 8% customer growth supported by growth in its
market-leading SIPP. While Adviser saw increased net outflows compared to
2023, we have seen early signs of positive momentum through the launch of new
solutions, a revised pricing model and improvements in service. Investments
has seen a significant improvement in its net outflow position (+£15bn vs
2023) and delivered £84m of annualised cost savings.
Driving performance improvements across our businesses
Investments has seen an improvement in profitability and overall net flow
position which the business can build on. Further progress will be driven by
focusing on strengths, improvements in investment performance, and
enhancements to the operating model.
Adviser is seeking to deliver a step-change in performance and improve client
service to provide a consistently excellent level of service to clients,
which will be critical to return the business to growth.
"We remain focused on executing our transformation plan, which is essential to
driving sustainable profitability across the Group."
Ian Jenkins, Interim Chief Financial Officer
interactive investor's customer numbers continue to rise steadily. Our
passion for serving our customers, our focus on continuous improvement, and
our desire to grow market share have delivered impressive results, which
leaves the business well-placed for further growth.
2025 focus
In 2025, we have appointed Richard Wilson as new Group Chief Operating Officer
who will drive long-term benefits from our Transformation programme. Our focus
will be on further efforts to streamline the business, e.g. Investment
operating model enhancements, technology and operational process efficiency
improvements and functional support model enhancements. We will also focus on
supporting future growth. This includes investing in our people, talent and
culture; improving our use of technology and AI; and enhancing our business
controls.
Improve client experience
We put our clients at the heart of everything we do. We aim to provide an
exceptional client experience by delivering the outcomes they seek and
exceeding their expectations.
Progress in 2024
Understanding the needs of our clients is key to our ability to deliver on
their expectations both in terms of required outcomes and our service
proposition.
interactive investor
interactive investor has focused on expanding its products and proposition to
deliver a great experience and outcomes for clients. In 2024, we launched our
first managed portfolio service (Managed ISA) for less confident investors
and ii Community, a social platform for customers to discuss their investment
strategies and support each other's decision-making. We implemented a new
platform and design for the public website to create a modern, welcoming
experience for existing customers and prospects. These enhancements supported
a seven-point improvement for the website's Net Promoter Score (NPS) score. We
also enhanced in-app experience, including cash transfers, account
administration and referral programmes.
Adviser
Improving client service is a priority for the business. In 2024, we saw an
18-point improvement in our NPS. This was thanks to extensive improvements we
made to our platform and processes. Notably, we increased data processing
automation by ensuring only complete requests are processed, improving overall
turnaround times. We increased the use of digital signatures and smart forms
with embedded validation and routing. We also enhanced communication on
service-level expectations for consistent client understanding. While we have
made progress, we intend to build on this in 2025 through ongoing service
improvements.
Investments
A priority for 2024 was to improve investment performance to deliver better
client outcomes. Through the ongoing delivery of our extensive performance
improvement plan we are now starting to see a difference in performance. Over
one year, 77% of our AUM performed (2023: 55%) and 60% performed over three
years (2023: 51%). We also sought to clarify our brand identity by defining
ourselves as a specialist asset manager that focuses on areas of strength and
growth, e.g. Credit, Specialist Equities and Real Assets. Alongside these
improvements, the business delivered a range of client service enhancements.
For example, we upgraded our investment reporting proposition to deliver gains
in efficiency and lead times; and we improved clients' digital experiences
through improvements to our in-house client portal.
"Improving client experience is fundamental to our success each year. While we
are proud of the service we provide, we know there is more to do. We are
focused on continuously improving our ability to meet and exceed clients'
expectations."
Jason Windsor, Chief Executive Officer
interactive Net Promoter Score average for the website for 2024 reflecting good customer
experience.
investor
+40
Net Promoter Score average for 2024. An 18-point improvement from 2023.
Adviser
+34
Our "Voice of the Client" score remained stable at 7.6/10, reflecting an
ongoing commitment to client service.
Investments
7.6
2025 focus
We will continue improving client experience across each business. Below, we
highlight examples of our focus areas in 2025.
interactive investor
- Expand our solutions for lower-confidence investors through a Managed SIPP
product, launch a trading solution (ii 360) for more advanced users and
rollout of ii advice - a digital advice solution.
Adviser
- Embed new client service team to drive forward service proposition and improve
service timings.
- Maintain investment in the platform to automate and improve processes,
integrating further with third parties across the advice ecosystem to increase
adviser capacity.
Investments
- Drive investment performance improvements by investing in the right people,
processes and technology.
Strengthen talent and culture
A strong culture with high-quality, engaged talent is fundamental to our
long-term success. We continue to invest in our people to help build the
foundations for sustainable growth.
Our cultural commitments
We have four commitments that serve as the foundation of our culture: we put
the client first, we are empowered, we are ambitious and we are transparent.
We engage colleagues around these commitments to ensure they are embedded in
our organisational structure, processes and decision-making.
Progress in 2024
In 2024, we launched a new career framework to give all employees a clear
understanding of their roles and career levels, and to enable them to plan
their future careers. We also cascaded detailed scorecards through each
business, with ultimate accountability at the executive level, mapping back to
individual objectives and goals to ensure people feel more connected to the
Group's success.
We also embedded new talent and leadership across the organisation with
changes and hires, including a new Group CEO in Jason Windsor, additional
Group COO responsibilities for Richard Wilson, new leadership of Investments
in Xavier Meyer, a new CTO in Investments, and a number of leadership changes
in our Adviser business. In February 2025, we also announced the appointment
of Siobhan Boylan as Chief Financial Officer (CFO), subject to regulatory
approval.
While we still have room for further improvement, our employee sentiment has
continued to increase, with engagement scores now at 57% (2023: 54%).
Meanwhile, our talent development remained strong with average learning hours
increasing on average by four hours per person. Through diversity, equity and
inclusion work, we continue to oversee and drive progress allowing all our
talent to thrive. Read more on pages 49-52).
"I am proud of the strides we are making to develop our talent and culture. We
remain focused on establishing an even more engaged business as part of our
mission to deliver great outcomes for clients and customers."
Tracey Hahn - Chief People Officer
2024 outcomes
57%
Employee engagement score (2023: 54%)
40%
Female representation at senior leadership
(2023: 34%)
2025 focus
In 2025, we are aiming for continued improvements in our talent and culture
processes, targeting an improved employee engagement score of 60%.
Each business is fully focused on developing strong, motivated teams and
ensuring clear career progression and growth opportunities are available for
our people.
A business with consistent standards supporting all colleagues
Our talent and culture priorities Examples of our progress Target outcomes
Embed best-in-class leadership - Refreshed Group leadership team. - Confidence in our leaders.
- Strengthened Adviser leadership team. - Aligned focus on clients.
Improve our operating model - New, smaller Group Operating Committee, driving pace of decisions. - Increased speed of execution.
- Broadened Executive Leadership Team with greater client expertise. - Greater proximity to business.
Invest in our people - New career framework launched. - Attract and retain the best people.
- Extra four learning hours per person. - Better performing teams.
Evolve our culture - Improved colleague engagement score of 57% (2023: 54%). - Robust performance management.
- Scorecards to track execution. - Increased innovation and efficiency.
Strong foundations for growth
Sir Douglas Flint
Chair
2024 marked a further year of transition, during which good progress was made
in returning abrdn to a position from which it can grow sustainably and
deliver the profitability required by our shareholders and offer the career
opportunities and recognition our colleagues seek.
Our transition is based upon building profitability in all three of our Wealth
and Investment businesses, each of which has good potential for growth, with
each at a different stage of development. The Board's principal accountability
is to ensure the disciplined allocation of capital to where it can deliver the
best long-term outcomes for all stakeholders and to release or redeploy
capital where it underperforms its required returns; the Board takes this
accountability extremely seriously.
Performance in 2024
We entered the year with an ambitious plan to invest to simplify our profile
and address an uncompetitive cost/income ratio.
I am pleased to report we surpassed the cost reduction targets we announced at
the beginning of 2024. Most of this was achieved within the operations,
technology and functional areas within the Investments business and we are on
track to meet the £150m cost improvement target we set by the end of this
year. We continued to rationalise non-core activities, including disposing of
our European-based private equity business and majority disposal of Focus
Business Solutions, a software product and services business and expect to
take further steps to simplify our business.
But resumption of profit growth cannot be achieved through cost reduction
alone, although that is essential both to fund the reshaping of our
businesses, where that is needed, and to support growth in our fast-growing
segments.
Our leading D2C platform business, interactive investor (ii), delivered
excellent results and is our main engine of growth opportunity, fully
justifying the confidence we had in its business model on acquisition in 2022.
We committed additional funding to build its brand recognition and expand its
customer numbers organically. That investment was rewarded with ii close to
doubling its net inflows in the year, attracting the largest share of net
flow in its market with excellent penetration of SIPP accounts.
Our Adviser platform business remained our most profitable business yet
suffered a further year of disappointing net outflows which we are taking
steps to reverse. During the year we refreshed the leadership of the business,
added resource to improve customer experience and adjusted our pricing to
improve our competitive positioning, all with the objective of returning to
net positive flows as soon as possible.
Our Investments business made progress in 2024 with net outflows considerably
lower and profits ahead of the prior year. We achieved this first by
committing to and executing successfully a cost reduction programme that
targeted areas where we were out of line with best-in-class peers and where
fully costed service delivery was no longer covered by projected revenues.
Considerable attention was directed to reshaping the Investments business
without impacting client interface and service, with most of the cost
reduction achieved in 2024 targeted in support and operations areas. We
simplified the leadership structure to streamline decision making and
implemented process improvement plans across the entirety of the Investments
business.
The business mix we have today reflects the significant repositioning of the
company over the last six years to a modern and digitally-focused Wealth &
Investments group.
Jason Windsor in his Chief Executive Officer's review will amplify the key
elements of performance in 2024, clarify the strategic priorities of each of
our businesses and introduce the new name of the Company approved by the
Board, aberdeen group plc.
Investment environment and trends
For all of our businesses, the investment environment is important as it
impacts the risk appetite and allocation decisions of our clients and
customers. Market conditions in 2024 were mixed. Investor appetite fuelled
continuation of the long period of concentration of asset allocation towards
the vibrant US economy and within it the largest US technology related
companies while interest in Asia and emerging markets was muted. China's
slower than hoped for economic recovery post-pandemic cast a shadow over
investor appetite for Asian exposure which was detrimental to us given our
long heritage of investing in that region. Pressure on traditional asset
manager revenues reflected further growth in the market share of passive
strategies versus active. In the UK, flows out of equity products also
reflected continuing decumulation from UK defined benefit pension schemes, now
in run-off, that were historically the bedrock of asset gathering for UK-based
asset managers.
These trends are leading to shifts in the focus and shape of traditional asset
management businesses. Notably, as concerns have grown over the sustainability
of the valuation levels to which public equity markets in the US have reached,
interest in gaining greater access to private market assets has expanded
markedly. In European public markets, we are now seeing emerging consolidation
among the largest asset managers to address their cost and distribution
challenges, a trend that we and market commentators expect to continue.
Board matters
Most significantly, during 2024, we completed an orderly succession in the
leadership of the firm. Stephen Bird handed over the reins to Jason Windsor in
May last year, with Jason being appointed as CEO in September of that year,
following a thorough, externally supported, process. I am pleased to report
that Jason has made a strong start as CEO, impressing both clients and
colleagues with his commitment to prioritising service delivery focused on
enabling our clients to meet their investment objectives. Once again, I would
like to place on record our thanks to Stephen for his leadership as CEO
through what was a very turbulent period.
In other Board changes we welcomed Katie Bickerstaffe and Vivek Ahuja to the
Board with effect from 1 October last year. Katie brings considerable retail
and consumer experience as well as proficiency in delivering business
transformation and digital business change programs. Her career included
spells at Unilever, Pepsico, Dyson and Marks & Spencer from where she
retired in July last year as co-CEO. Vivek has over thirty years' experience
in international financial services notably with Standard Chartered plc where
he was Deputy CFO and in his non-executive career, Vivek chaired the risk
committee at NatWest Markets.
These appointments followed the departure of Catherine Bradley from the abrdn
plc Board at last year's AGM to concentrate her service to the Group as Chair
of ii. In December we announced that, as a consequence of her appointment as
Chief Financial Officer and an Executive Director of HSBC Holdings plc, Pam
Kaur will not seek re-election at the forthcoming AGM. We are disappointed to
lose Pam's input but are delighted by her appointment to such an important
role.
Finally, we were delighted to announce on 28 February that Siobhan Boylan will
be joining the Company as Chief Financial Officer and an Executive Director,
subject to regulatory approval. Siobhan is expected to join the Company in the
summer.
Siobhan is an accomplished CFO who brings over thirty years' experience and
significant knowledge from across the financial services sector. She is
currently CFO of Coutts & Co, the private banking arm of the NatWest
Group, and will step down from her role as an independent non-executive
director of Jupiter Fund Management prior to joining the Company.
Prior to Coutts & Co, Siobhan was CFO of wealth manager Brewin Dolphin ,
CFO of the asset management subsidiary of Legal & General, LGIM, and held
various senior finance roles at Aviva plc.
The appointment of Siobhan completes the line-up of the Executive Leadership
Team assembled by Jason to build on the solid foundations for growth he
describes in his report.
Once these changes take place, the Board will comprise two executive
directors, seven non-executive directors and the Chairman.
With a Board refresh also completed last year, it is now an appropriate time
to commence the search for my own successor as Chair and Jonathan Asquith as
Senior Independent Director will lead this process, starting immediately. I
will be working closely with Jonathan and Jason to ensure a smooth handover
when the time comes.
Finally, the Board is recommending a final dividend of 7.3p per share taking
the total for the year to 14.6p per share, identical to the prior year. The
proposed final dividend will be put to shareholders at the upcoming AGM. The
full-year dividend was 92% covered by net capital generation in the year.
Looking forward
As we entered 2025, two words dominated commentators' perspectives on the year
ahead - 'uncertainty and disruption'. We have already seen the first major
surprise given the market turmoil following the launch of the Chinese AI App
'DeepSeek' in late January. More broadly we are entering a period where
globalisation and multilateralism are being challenged as never before, where
protectionism and nationalism are being advanced under many guises - supply
chain resilience, security of supply, national security considerations, and
attempts to address persistent economic imbalances through tariffs. On top of
this, the geopolitical and fiscal challenges brought about by a lower growth
global economy, the pause in appreciation of living standards in much of the
world, unplanned migration, demographic ageing and its impact on health and
social care systems, climate change preparation and continuing major military
conflicts - all have to be taken into account when designing investment
strategies to protect and grow the savings entrusted to us. Our research-based
experience and skill in constructing portfolios to meet investment goals
through active management gives us the agility to respond to changing economic
circumstances and risk preferences. We do this through accessing selectively
the wide range of asset classes we manage, which places us in an excellent
position to meet the requirements of both our institutional and retail wealth
clients.
This latter customer segment is increasingly important to us, especially as
around the world greater emphasis is being given to placing responsibility on
the individual to plan and save for lifetime events and in particular
retirement. We welcome steps being taken in the UK to build a retail
investment culture through simplifying the regulation around advisory services
and introducing the concept of 'targeted support' to facilitate broader access
to investment services through helping consumers to make informed decisions.
We also welcome the greater regulatory emphasis now being permitted on 'value'
versus 'cost' when assessing suitability of investment products. This follows
on from the encouragement now being given to our regulators to accept that a
higher tolerance of risk in investment outcomes is necessary to enhance
returns over the long term and thereby attract investment to asset classes
such as infrastructure that will create the future we aspire to build for
future generations. If we had an ask to facilitate further encouragement to
the creation of an equity culture, we would join others in noting that the
stamp duty tax on share purchases in the UK is higher than in many other
countries, many of whom indeed do not have such a levy, and that this acts as
a disincentive to investment in UK listed versus overseas shares. In a
globalised investment world competing for capital this is a significant
disadvantage.
All major economies today seek growth to fund the fiscal and societal
challenges facing them; and sustainable growth requires investment to build
the infrastructure, the skill base and the innovation that will deliver such
growth. We have a major responsibility to harness the investing skills within
our Investments business to allocate capital to make this a reality and to
facilitate access to such investment products as widely as possible through
our distribution channels in a cost effective and risk transparent way.
The coming year will offer both opportunities and challenges for all the
reasons noted above but we now have a sound base from which to grow and are
well down the road of redesigning our businesses to be even more relevant to
the customer segments we serve. We owe our colleagues a huge debt of gratitude
for all their efforts to build this position and we look forward to updating
shareholders on progress as the year develops.
Sir Douglas Flint
Chair
Growing in Wealth, Repositioning Investments
Jason Windsor
Chief Executive Officer
I was delighted to be appointed as CEO of the Group in September, and stepped
into this role with a sense of determination and optimism about the challenges
and opportunities ahead.
Since taking the role, the depth of talent, and the commitment to our clients
and customers, has shone through. We are working hard to deliver better
outcomes for all of our stakeholders, and I would like to thank our clients,
colleagues and shareholders for their support.
In 2024, we reported adjusted operating profit of £255m (2023: £249m), with
all three businesses contributing higher profits than last year. This was
driven by cost discipline, better markets and a strong performance by
interactive investor.
The reasons for my optimism are clear. First, the performance in 2024 has
strengthened our foundations with significant headroom for growth. As we move
through 2025 and beyond, we are well positioned as a Wealth & Investments
group with two leading businesses in the fast-growing UK Wealth sector,
alongside a specialist asset management business that is repositioning its
focus on its strengths and where it sees opportunities to drive growth
globally. This is underpinned by a commitment to continuous improvements in
efficiency, technology and talent.
We intend to deliver through a relentless focus on execution, with clarified
accountabilities measured by extended KPIs. Across the Group, we are already
driving improvement by removing distractions, simplifying the business,
eliminating unnecessary drags on profitability, and focusing management time
on the right areas.
Our strategic priorities and FY 2026 targets
As part of our strategy update, each of our businesses has set a clear
strategic objective:
- interactive investor: Sustain efficient growth by building on our
differentiated proposition and investing in the ii brand.
- Adviser: Return to net inflows by enhancing our proposition and
delivering leading client service.
- Investments: Step change in profitability by repositioning to
areas of strength and opportunity, and driving improved efficiency.
Our three Group priorities that I set out at Half year remain unchanged. We
are focused on transforming performance, improving the client experience and
strengthening talent and culture.
Alongside, we continue to simplify the business, focusing on where we have
competitive advantage. We made progress in 2024 with a number of non-core
divestments, and we have commenced a review of strategic options for our
Finimize business.
We are also announcing new Group targets for FY 2026, building on the momentum
achieved in 2024:
- Adjusted operating profit to increase to at least £300m in FY
2026; an increase of at least 18% from 2024. This is expected to reflect a
significant uplift in contribution from interactive investor along with growth
in Investments, partly offset by the impact of the previously announced
repricing in Adviser.
- Net capital generation is expected to increase to c.£300m in FY
2026, an increase of c.26% from 2024.
Better performing businesses and a simplified Group will support reinvestment
into growth areas, improve capital generation and support our dividend policy.
Combined with the further strengthening of our capital position through the
deployment of our pension surplus, this presents what I believe is a
compelling route to creating greater value for the Group.
New corporate name
This is a Group to be proud of, with a promising future. We will deliver by
looking forward with confidence and removing distractions. To that end, we are
changing our name to aberdeen group plc. This is a pragmatic decision marking
a new phase for the organisation, as we focus on delivering for our customers,
people and shareholders.
We do not intend to make any changes to our subsidiary legal entity names or
the names of our underlying funds (including the CUSIPs or ISINs) at this
time, and our LSE ticker will remain ABDN. We will now start to use 'aberdeen'
as the principal trading identity for our Investments and Adviser businesses.
New senior leadership team
Delivering on our ambitions will take real determination. In November, I
reshaped the senior executive team, including setting up a streamlined Group
Operating Committee to improve the pace of decision-making, and an extended,
more commercial, Executive Leadership Team. By putting the right talent in the
right roles, we are now well placed to accelerate progress against our
strategic priorities.
As our new Chief Operating Officer, Richard Wilson is tasked with driving the
organisation harder, improving operational efficiency along with sustaining
the impressive growth in interactive investor. The first focus of our new CEO
of Investments, Xavier Meyer, is our clients - bringing them better
experience, service and product performance.
On 28 February, we announced the appointment of Siobhan Boylan as CFO, subject
to regulatory approval. Siobhan's skillset and experience is highly relevant
and complementary to the rest of the leadership team and I know she will make
a significant impact when she joins this summer.
Overview of 2024 performance
Cost discipline, better markets and a strong performance by interactive
investor enabled us to improve adjusted operating profit to £255m (2023:
£249m), with all three businesses reporting higher profits than last year.
It is important to make clear, however, this is well below the level of
profitability we aspire to, and we see much more potential across the Group.
Overall we reported a transformationally higher IFRS profit before tax of
£251m (2023: loss £6m) which includes higher adjusted operating profit, the
gain on sale of the European-headquartered Private Equity business of £92m
and lower restructuring and corporate transaction expenses of £100m (2023:
£152m).
AUMA is up 3% on last year to £511.4bn with total Group outflows of £1.1bn,
representing a substantial improvement on 2023 when outflows were £17.6bn. As
well as strong customer and AUMA growth in interactive investor, this was
supported by market conditions, which more than offset the impact of the sale
of our European-headquartered Private Equity business.
The transformation programme we launched in January 2024 has surpassed the
year one targets we set out, delivering £70m of in-year cost savings and over
£100m of savings on an annualised basis. We remain on track to deliver a
reduction in run-rate costs of at least £150m by the end of 2025, with a
commitment to continually seek further efficiencies.
interactive investor
Strong performance with excellent foundations for sustained growth.
interactive investor has undoubtedly delivered the strongest performance
across the Group this year. A focus on organic growth saw total customer
numbers increase by 8% to 439k. This helped to deliver net inflows totalling
£5.7bn compared to £2.9bn in 2023, making it number one in the UK for D2C
flows across the year, and contributed to a 17% increase in AUMA to £77.5bn.
Trading and FX revenues also rose sharply, with retail trades up by almost
30%. Around a quarter of all UK retail share trading and a third of UK retail
international trading last year were transacted through interactive investor.
Adjusted operating profit in interactive investor was £116m (2023: £114m),
an increase on last year despite the sale of the discretionary fund management
business and the transfer of MPS to Adviser.
A number of key actions contributed to interactive investor's growth in 2024.
Greater investment in the ii brand and marketing delivered improved customer
awareness. This was supported by strong structural growth across the D2C
market, which we expect to continue. Growth has also been driven by a series
of proposition enhancements. In 2024, we launched a new Managed ISA and
introduced ii Community, which offers a social platform for users to connect
with, and learn from, other investors. With a Managed SIPP (designed with
aberdeen Investments), ii advice (a digital advice service) and ii360 (an
advanced trading platform), all expected to launch in 2025, we look to further
broaden our customer appeal.
By leveraging our excellent technology base and disruptive pricing model to
deepen and widen customer engagement, we are well placed to enjoy the compound
effects of gaining a growing share of a growing market.
Adviser
Actions being taken to achieve client service leadership, reverse outflows and
return to growth.
Adjusted operating profit in Adviser was up 7% to £126m (2023: £118m).
Markets also helped support a small rise in AUMA to £75.2bn (2023: £73.5bn).
While the increase in profit is welcome, the picture on flows was
disappointing with elevated redemptions leading to net outflows of £3.9bn
(2023: outflows £2.1bn). Adviser remains at number two in the UK market by
AUA, and serves over 50% of the UK's IFAs. Returning to growth is our key
priority and a range of actions has already been put in place to achieve this.
We made an important shift on pricing, becoming more competitive as we seek to
take advantage of a structurally growing market. We also made important
enhancements to our proposition, with the launch of our Money Market MPS
option in February 2024, followed by our cash savings solution on the Wrap
platform in July.
Adviser has also strengthened its sales and distribution capabilities. A new
Chief Distribution Officer has been appointed, one of several senior
appointments to strengthen the Adviser leadership team.
We have acknowledged that aspects of our client service have not been as
strong as they should and we have undertaken a range of measures to address
this. This work has resulted in much shorter delivery times in critical areas
like sign-ups and transfers. Our customer feedback scores have improved over
the year, and we expect to make further progress in 2025.
Adviser holds an enviable position in an attractive market and, through these
actions, we are focused on re-establishing a leadership position in the
market, with a growing and profitable business.
Investments
Significant growth in net flows, with cost discipline and markets offsetting
changes in asset mix.
2024 brought more favourable market conditions than experienced in recent
years, helping Investments AUM to rise slightly from £366.7bn to £369.7bn,
despite the sale of the European-headquartered Private Equity business and
other corporate actions (£(6.6)bn).
Net outflows reduced significantly from £19.0bn in 2023 to £4.0bn, with
Institutional & Retail Wealth flows improving by over £18bn to an overall
net inflow of £0.3bn, reflecting a material reduction in redemptions and a
31% improvement in gross flows excluding liquidity to £25.5bn. While outflows
in equities remained a sectoral challenge, this was offset by good momentum in
our alternatives, quantitative and liquidity strategies. Insurance Partners
net outflows increased to £4.3bn (2023: outflows £1.1bn) principally
relating to run-off in the heritage business.
The ongoing trend toward passive strategies continues to put pressure on
margins. In this environment, cost discipline has been critical, and we have
delivered a reduction in adjusted operating expenses in Investments of 11%,
helping to deliver an increase in adjusted operating profit to £61m (2023:
£50m).
Investment performance is improving, with the overall percentage of AUM
performing over three years at 60% (2023: 51%), with even stronger performance
over one year at 77% (2023: 55%). Further work remains on equities
performance, largely due to the weighting of our business toward emerging
markets and Asia. Our programme of improvements is beginning to gain traction,
with performance in multi-asset and equities showing welcome increases over
the one-year period.
Momentum is shifting in Investments, and there is potential to unlock
substantial profitable growth over time. With the changes to the executive
team and a sharper strategic focus, we are now better placed to realise the
potential of our Investments business.
As we move ahead, we will preserve and optimise our offering in core areas,
while repositioning Investments to focus on the specific capabilities where we
have competitive advantage and clear market opportunities, namely real assets,
credit and specialist equities. We also expect to build scale in important
areas of the business (e.g. Insurance, Closed End Funds and Institutional
Solutions), and expand further in Private Markets and Wholesale, where we see
attractive growth opportunities. At the same time, we will redouble efforts to
achieve greater efficiency, with automation of more processes, to drive better
results.
Capital allocation and dividend
Our commitment to disciplined capital management was maintained in 2024,
finishing the year with indicative CET1 of £1.5bn (2023: £1.5bn), and
coverage of 139% (2023: 139%). Part of delivering better performance lies in
simplifying the business, and the non-core divestments we made through the
year delivered an overall gain on disposals of £100m, which supported our
transformation.
Adjusted capital generation of £307m (2023: £299m) covered our dividend
1.2x. Net capital generation was £238m (2023: £178m), up by a significant
34%.
As we have previously highlighted, the Group's defined benefit pension plan
has been successfully managed over the years, resulting in a significant
surplus. We have now reached agreement with the Trustee to use part of the
surplus to fund the cost of providing defined contribution benefits to current
employees. We expect this to deliver a significant annual boost to capital
generation of c.£35m starting from July 2025 (we expect no impact on adjusted
operating profit). This agreement enables the Group to unlock value from the
plan, while largely maintaining the surplus and retaining optionality.
We understand the importance of the dividend to our shareholders. The Board's
intention is to pay a total annual dividend of 14.6p per share until it is
covered at least 1.5x by adjusted capital generation. Our commitment to
growing capital generation to support the dividend is evidenced by our new
target of
c.£300m net capital generation in 2026, an increase of c.26% on 2024.
Sustainability
As an organisation of over 4,000 people, with clients and customers across the
globe, we have a responsibility to make a positive impact on the communities
we live and work in. With this in mind, we have refined our sustainability
strategy in 2024, with a focus on ensuring transparency, accountability and
clarity of purpose. Our approach is now based around three pillars:
environmental transition, inclusive growth and responsible business.
As an investor, we have been factoring sustainability into our approach for
many years. As well as considering ESG as part of our standard investment
processes, we offer a broad range of sustainability focused products, informed
by deep research and expertise.
Our commitment to inclusion saw our gender pay gap further reduce this year,
and we have also published ethnicity pay gap data for the first time. Going
into 2025, we plan to develop our inclusive growth pillar further with a
strategy focused on the 'lifelong ladder' of saving and investment. Financial
education and employability are at the heart of this strategy as we believe
these are issues on which we and our partners can have the greatest impact.
Looking ahead
Across our markets there are compelling long-term structural growth drivers
which we are well placed to leverage - changing demographics, generational
wealth transfers, and the growing need for people to secure their own
financial futures - and these drivers are likely to continue for several years
to come.
Our ambition is to be the UK's leading Wealth & Investments group, with
fast growing direct and advised wealth platforms and a specialist asset
manager that operates worldwide with strength in areas of market growth, all
driven by excellent client service, technology and talent.
We have substantial headroom for growth in each of our businesses. In
parallel, we are simplifying our business, focusing on where we have
competitive advantage.
Success will demand a relentless focus on execution. I am confident we have
the right team to meet this challenge. We are setting out clear plans for all
three businesses, together with ambitious 2026 targets which will enable us to
provide evidence of our progress, as we transform the Group to achieve its
full potential.
Jason Windsor
Chief Executive Officer
A Wealth & Investments group with strong foundations for growth
Positioned for success through market cycles
Driven by our purpose to enable our clients to be better investors, we have
strengthened our business through effective capital management and investment
to create strong foundations for growth.
Our strengths and resources Positioned to benefit from key themes shaping our markets An efficient, diversified model
UK's second-largest direct-to-consumer investment platform by AUMA and number 1. Long-term structural growth in UK savings and wealth, driven by: Strengthened, simplified business
one by net flows.
-Increased personal responsibility for savings -Strategic focus
UK's second-largest advised platform by AUA, powered by innovative technology.
-Ongoing wealth transfer -Robust governance
Specialist asset manager providing investment solutions to meet complex needs.
-Reducing the savings and advice gap -Effective capital management
Global distribution and client base.
2. Ongoing energy transition: Driving investment in long-term growth
Strong balance sheet to drive shareholder value and client confidence.
-Real assets growth -People
-Infrastructure spending -Product
3. Digital innovation -Technology
-Transforming investment platforms and asset allocations to support more Structured around three businesses
complex client needs and outcomes. interactive investor
Adviser
Investments
Positioned to benefit from key themes shaping our markets
1. Long-term structural growth in UK savings and wealth, driven by:
- Increased personal responsibility for savings
- Ongoing wealth transfer
- Reducing the savings and advice gap
2. Ongoing energy transition:
- Real assets growth
- Infrastructure spending
3. Digital innovation
- Transforming investment platforms and asset allocations to support more
complex client needs and outcomes.
An efficient, diversified model
Strengthened, simplified business
- Strategic focus
- Robust governance
- Effective capital management
Driving investment in long-term growth
- People
- Product
- Technology
Structured around three businesses
interactive investor
Adviser
Investments
Delivered through strong operational processes
Controlled processes
Our control environment helps us manage risk effectively, provide business
security and maintain operational resilience.
Efficient operations
We are enhancing our operations for agility, speed and efficiency, supported
by technology which aims to deliver the best possible experience.
Creating long-term value
Diversified business and a strong balance sheet support long-term value
creation
Investment in long-term growth
Payment of dividends to shareholders
How we make money
We earn revenue mainly from:
- Asset management and platform fees based on AUMA.
- Subscription and trading fees.
- Interest margins on cash balances.
Value shared with stakeholders
Clients
We focus on delivering outcomes that truly matter to our clients. We draw on
our expertise and insight with the aim of delivering long-term investment
performance.
Investment performance
77% 60%
One-year Three-year
Colleagues
We aim to attract and develop the best people for leadership roles, and to
offer clear pathways for career advancement.
57%
Employee engagement score
Society
We have important responsibilities to society and the environment. Through
sustainable investment we increase the positive impact we can have through our
operations.
AA
MSCI ESG rating
Shareholders
We aim to create sustainable shareholder value over the long term.
14.6p
Full year dividend
Read more on Chief Financial Officer's overview on pages 66 to 81. Read more on Stakeholder engagement on pages 59 to 61.
Delivering improved financial performance in 2024
Cost discipline, better markets and a strong performance by ii have ensured
improved profitability in the year. However, profitability remains well below
the level that we aspire to, and we see much more potential across the Group.
Financial performance summary
Adjusted net operating revenue(1) Adjusted operating profit
£1,321m £255m
reduced by 6% to £1,321m (2023: £1,398m) reflecting the impact of net increased by 2% to £255m (2023: £249m) reflecting higher profitability in
outflows and the expected lower margins in Investments as well as the net Investments, Adviser and interactive investor, partly offset by higher central
impact of corporate actions. Group corporate costs.
Adjusted operating expenses IFRS profit before tax
£1,066m £251m
reduced by 7% to £1,066m (2023: £1,149m) driven by the continued progress on of £251m (2023: loss £6m) includes the gain on sale of our
delivering cost savings. European-headquartered Private Equity business and lower restructuring and
corporate transaction expenses of £100m (2023: £152m).
Net outflows
£1.1bn
improved to £1.1bn (2023: £17.6bn), primarily reflecting strong Investments
gross inflows in quantitatives, liquidity and real assets. ii net inflows were
strong at £5.7bn (2023: £2.9bn).
1. The measure of segmental revenue has been renamed from net
operating revenue to adjusted net operating revenue. See Note 3(c) for a
reconciliation of these revenue measures.
Our capital resources provide strength to allow for investment to grow the
business and to be more efficient.
Capital performance summary
Common Equity Tier 1 (CET1) Value of listed stake in Phoenix
£1,465m £0.5bn
was stable at £1,465m (2023: £1,466m) including the benefit from adjusted of £0.5bn (2023: £0.6bn) is excluded from the CET1 capital position.
capital generation in the year and the disposal of the European-headquartered
Private Equity business. This was offset by the payment of dividends, and
restructuring expenses.
Cash and liquid resources Full year dividend per share
£1.7bn 14.6p
remained robust at £1.7bn (2023: £1.8bn). These resources are high quality was maintained at 14.6p (2023: 14.6p), with a dividend coverage on an adjusted
and mainly invested in cash, money market instruments and short-term debt capital generation basis of 1.18 times (2023: 1.12 times). It remains the
securities. Board's current intention to pay a total annual dividend of 14.6p until it is
covered at least 1.5 times by adjusted capital generation.
Read more about our financial and capital performance in the Chief Financial
Officer's overview section of this report.
ii
Richard Wilson
CEO, interactive investor
20%
self-directed retail investment
platform market share of AUA(1)
439,000
total customers(2)
8%
growth in total customers(2)
29%
growth in SIPP customers(2)
£77.5bn
AUMA
It was another impressive year for ii as we delivered strong year-on-year
performance ahead of expectations to support our sustained, organic growth.
We welcomed 32,000 net new customers and continued to see strong growth in the
number of customers who choose to hold an ii SIPP. This contributed to around
£6bn net AUA inflows - 31% of UK market inflows(3) - and incremental growth
across most market share metrics.
Trading activity was 29% above 2023 levels. This was supported by increased
international trading, which exceeded the previous record set in 2021 and
benefited from our multicurrency global markets offering.
In 2024, we continued to enhance our customer proposition through several
major initiatives.
Firstly, we launched our new Managed ISA targeting new and inexperienced
investors who lack the confidence to manage their own investments but
recognise its importance in achieving financial security.
We also launched ii Community, a new, innovative social trading platform that
enables people to discuss stocks, compare their portfolios and get inspiration
from other investors, while offering data-driven insights.
Additionally, we launched our new public website, providing improved
underlying technology and a better user experience to continue supporting our
growth.
Our roadmap for 2025 will bring another wave of new features, including our
Managed SIPP; our digital advice service, ii advice; and our advanced trading
platform, ii360.
Our results in 2024 reflect the successful combination of our fixed-fee
subscription model; wide-ranging investment choices; and reliable,
continuously improving customer experience that we provide.
As we continue to innovate, we believe we can help more people take direct
control of their financial future, regardless of how confident they are in
managing their investments.
1. Source: Compeer XO Quarterly Benchmarking report, as at 30 September 2024.
2. Excludes our financial planning business.
3. Source: Fundscape, Direct Matters Q4 2024 report, as at 31 December 2024.
Our strategic overview
We are driving strong, organic growth by broadening our proposition and
attracting new customer segments.
Who we are
Our ambition Be the UK's leading personal wealth platform with best-in-class propositions
Key capabilities and offerings Flexible D2C investment platform Simple investment Operating excellence & embedded risk culture
solutions
Who we serve Lower confidence Self-directed Active/expert
investors investors investors
Strategic areas of focus Broaden and deepen proposition Drive further customer engagement Increase automation and efficiency
Building a leading position in the UK savings and wealth market £4.6tn
UK Savings and
Wealth Market(1)
£366bn
D2C Platforms(2)
£77.5bn
interactive
investor
AUMA Adjusted operating profit
2023 2024 2023 2024
£66.0bn £77.5bn £114m £116m
1. Source: The Investment Association, Investment Management in the UK 2023-2024.
Figures as at 31 December 2023 and inclusive of retail and institutional
markets.
2. Source: Fundscape, Direct Matters Q4 2024 report, as at 31 December 2024.
Sustained organic growth
Following several years characterised by M&A activity, our focus at ii
since 2022 has been on organic growth. In 2024, we welcomed 32k net new
customers to the platform, representing an increase of 8%, which brought our
total number of customers to 439k (2023: 407k).
Net inflows were strong in each quarter, totalling £6.1bn across the year for
the ii direct platform, compared to £3.3bn in 2023. This contributed to AUMA
increasing by 19% to £73.8bn for the ii direct platform, up from £61.7bn at
the end of 2023.
To promote our organic growth strategy, we increased our brand activity,
launching our 'Say hi to ii' TV advertisements in Q4 2023, supported by a
broader content campaign across multiple marketing channels. Between Q4 2023
and Q4 2024, this helped our prompted brand awareness to increase from 13% to
25%, according to Boxclever data. Although this score remains behind our
closest peers', we hope to close the brand awareness gap by 2026.
Market-leading
We are the UK's leading flat-fee retail investing platform by AUA,(1) and we
continued to grow our self-directed AUA market share from 19.2% to 19.8%
between the end of Q3 2023 and Q3 2024 (the most recent figures available).
Compeer benchmark reporting showed that we also grew our share in the UK
cash-market trading, non-UK trading and SIPP markets, with the number of
customer SIPPs increasing by 29% to 80.6k.
Our market-leading proposition was also recognised through numerous awards.
For the third year running, we were named Recommended Provider of Self
Invested Personal Pensions (SIPPs) by Which! We also won the Association of
Investment Companies (AIC) Shareholder Engagement Award for the fourth
successive year. We also received six awards from Boring Money, including Best
Buy ISA, Best Buy Pension and Best for Low-cost Pension.
Continuous proposition enhancements
Our growth has continued to be supported by the successful delivery of
enhancements to our service offering and proposition, supported by an
extraordinary service team. During 2024, we launched several products and
services, including our new Managed ISA; ii Community, a new, innovative
social trading platform; and our new public website, alongside improvements to
our website research and content.
ii Community was deployed in October 2024. By the year-end, it had attracted
12.1k users who posted a total of 19.8k interactions. Through joining the
community, investors who feel more confident in managing their own money
('self-directed' investors) can generate ideas and share learning with others
by discussing individual stocks and comparing their portfolios. Community
members can also access performance data and portfolio breakdowns to compare
their investments to other users'.
Attracting new customer segments
Due to our flat-fee, subscription-based pricing model, our core customer base
has historically been self-directed investors. To attract new customer
segments, our more recent proposition enhancements have been designed to
attract a broader range of investors, including those with a lower level of
confidence in investing. Our Managed ISA, ii Community and lower,
essential-investor price points, which we introduced in 2023, are all designed
to encourage less experienced investors, including younger customers, to start
building their investment portfolios.
In 2025, we intend to launch our new Managed SIPP, which aims to help
inexperienced investors save for their financial futures through private
pensions. In the first half of the year, we also plan to introduce our
advanced trading application, ii360, to attract more sophisticated investors.
ii360 is designed to give users access to a wider range of instruments,
including derivatives and stock lending, as well as enhanced market data
through a state-of-the-art market trading experience.
Revenue growth
Our overall business revenues grew to £278m in 2024. Adjusting 2023 revenues
for the sale of our discretionary fund business and transfer of MPS to Adviser
in the same financial year, this represents an underlying growth of £19m, or
7%.
Trading and FX revenues increased by 15% and 70% respectively over the year.
Daily average retail trades increased to 20.1k compared to 15.7k in 2023 - a
year-on-year increase of 28%. Within this, non-UK equity trades grew by 64% to
4.3k, helping to drive the uplift in FX transactions. Trading activity was
driven by increased volatility, partly due to political and economic
uncertainties in 2024.
Subscription fees, gross of marketing incentives, increased to £60m (2023:
£58m) reflecting strong organic customer growth. Customer incentive costs
increased by £4m to £8m, including cashback and free period offers, which
have helped drive customer growth.
Treasury income increased slightly in 2024 to £138m (2023: £134m). Our net
treasury margin was 229bps, down slightly from 236bps in 2023. We expect our
margin to remain in the region of 200-220bps in 2025 if the Bank of England
steadily reduces the UK's base interest rate as expected at the time of
writing.
1. Platforum data, as at 31 March 2024.
Opportunities for growth
Market growth:
Structural market growth - UK savers taking increased personal responsibility
for their finances.
ISA market AUA growth of 10% p.a. over seven years to Q3 2024(1).
SIPP market AUA growth of 12% p.a. over seven years to Q3 2024(1).
How we're increasing market share:
Clear 2024-2025 product roadmap - Managed ISA and SIPP, new website, ii
Community and ii360.
Targeted offerings to retain and attract customers in each segment -
lower-confidence, self-directed and active/expert investors.
Improved research offering in 2024.
Continued review of our subscription-based pricing plans.
Growth through accessing adjacent customer segments
We test and learn new services to broaden our proposition with a subscription
core by carefully
leveraging the ii operating model and technology capabilities:
- Simplified experiences for less confident investors.
- All propositions follow a subscription model, with bolt-on fees for
added-value services such as advice and ii360.
- Position financial planning on top of service offering.
ii advice
(digital advice service)
Managed SIPP ii 360
("help me do it" SIPP) (advanced trading platform)
Lower confidence Self-directed Active/expert
Investors Investors Investors
(New segment) (Covered Segment) (New Segment)
Meeting broader customer needs
1. Source: Compeer XO Quarterly Benchmarking report data, as at 30 September
2024.
Our strategy in action
Improve client experience
ii is expanding its product range through the launch of a new Managed ISA and
Managed SIPP. These provide less confident investors with a simple, low-cost
way to save for their financial futures, while enabling us to continue
attracting new customer segments.
£4.99
flat, monthly fee for accounts with <£50,000
£11.99
flat, monthly fee for accounts with >£50,000
10
simple, low-cost portfolios available
"Our Managed ISA and SIPP make investing simple. By offering customers a
seamless experience, we hope those who are less familiar with investing will
trust us to manage their savings for years to come, while those who grow more
confident in making their own investment choices can eventually utilise the
full ii platform."
John Tumilty, COO, interactive investor
Giving people the confidence to invest
More and more people in the UK are taking responsibility for their own
financial futures. However, for inexperienced investors, the process can seem
daunting. With the launch of our Managed ISA in 2024 and Managed SIPP in 2025,
we're making it easier for those who would otherwise lack the confidence to
invest to build their nest eggs through a simple, managed portfolio.
Providing a safe home for customers' investments
In 2025, we will celebrate 30 years of customers trusting ii with their
investments. Our operating excellence and people's' confidence in our business
model is demonstrated by our Trustpilot score of 4.7. Underpinning our growth
and success is a strong, risk-based culture with our customers' goals and
requirements at the forefront of what we do every day.
Making investing affordable
Our Managed ISA is available at a flat-fee - £4.99 per month for those with
less than £50,000 and £11.99 for those with £50,000 or more. These fees are
highly competitive compared to our nearest rivals.
Offering a simple and differentiated choice
Our customers don't need to spend their time researching investments - they
are simply matched to one of 10 portfolios according to their risk profile and
sustainability preferences.
Our short questionnaire helps the customer identify which of the five risk
levels is most suitable for them. They can then choose whether to invest in a
low-cost indexed solution or a sustainability solution.
The process takes just a few minutes, making it a smooth customer experience.
Leveraging abrdn's capabilities
Our portfolios have exposure to funds managed by abrdn Investments, which
means our customers can benefit from the Group's wider capabilities through
the highly diversified, cost-efficient investment portfolios we offer.
Adviser
Noel Butwell
CEO, Adviser
£75.2bn
AUMA(1)
11%
AUA market share(2)
>50%
we have relationships with over half the UK's IFAs
401,000
total end customers
34
average service net promoter score (2023: 16)
+63%
third-party IFA net inflows into abrdn MPS
1. Includes Platform AUA of £72.4bn.
2. Source: Fundscape Q3 2024. Market share excludes Curtis Banks for consistency
with historical reporting.
In 2024, we continued to focus heavily on improving our client service
proposition and technology platform to drive progress across the business,
while investing in our people to create what I believe is the strongest
leadership team in the adviser platform market.
Among the most important changes we made with a view to returning the business
to growth were the major pricing changes we introduced to abrdn Wrap. This new
pricing structure materially improves the platform's competitiveness, which
puts us in a stronger position to attract and retain client assets.
Our investment in enhancing our service proposition has also begun to pay off.
We significantly improved our back-office pick-up times and speed to answering
client calls in 2024, while bolstering our client service team through further
hires.
We are committed to further investment in our service proposition in 2025 to
deliver market-leading client experiences. We are focused on further improving
service and delivering deeper integration to increase adviser efficiency and
thereby allow more customers to benefit from high-quality financial advice.
We remain well-positioned to capitalise on structural growth in the UK advice
market as we continue to pursue market share growth and address the widening
advice gap among retail customers.
Our strategic overview
We are realising value from our major investment programme with a view to
returning to net inflows.
Who we are
Our ambition To become the UK's leading provider of fully integrated adviser business
solutions
Key capabilities and offerings Wealth management platform Wrappers and investment solutions End-to-end advisory support
Who we serve Existing customers, targeting increased wrappers per customer Existing clients, New clients through advocacy
targeting increased primary partnerships
Strategic areas of focus Improve client service to create capacity for clients Enhance products and proposition Continue to improve platform
Structurally growing market with significant intergenerational wealth transfer £4.6tn
and advice gap
UK Savings and
Wealth Market(1)
£697bn
Adviser Platforms(2)
£75bn
abrdn
Adviser(3)
AUMA Adjusted operating profit
2023 2024 2023 2024
£73.5bn £75.2bn £118m £126m
1. Source: The Investment Association, Investment Management in the UK 2023-2024.
Figures as at 31 December 2023 and inclusive of retail and institutional
markets.
2. Source: Fundscape Q4 Press Release, January 2025, AUMA as at 31 December 2024.
3. abrdn Adviser AUMA as at 31 December 2024. Includes Platform AUA of £72.4bn.
Focused on building momentum
The adviser platform market continued to face challenges in 2024. Net market
inflows of £13.4bn (2023: £8.3bn) represented a year-on-year increase, but
these flows were still materially below those in prior years(1). Within our
Adviser business, we experienced net outflows of £3.9bn during the financial
year compared to £2.1bn in 2023. Our AUMA rose slightly from £73.5bn to
£75.2bn driven by positive market movements.
Revenue grew by £13m to £237m, supported by the annualisation of our revised
SIPP distribution agreement with Phoenix, which took effect in July 2023.
However, our total customer numbers fell from 420k to 401k, again reflecting
the net flow position.
During the year, we made major changes with a view to building positive
momentum within the business, which included enhancing our client service and
proposition, improving our competitive position through strategic repricing
and investing in our people. These initiatives have already begun to yield
results in terms of client satisfaction and service scores, the user
experience on our technology platform and our new business pipeline.
By the end of the financial year, there were also some early signs of progress
in flows, with net outflows reducing in both Q3 and Q4. We remain committed to
returning to consistent net inflows through our strategic focus areas as
outlined below.
Improved client service to create capacity for clients
Building on our significant technology investment in 2023, we delivered major
improvements to client service in 2024. Notably, we reduced the steps involved
in several key processes to enhance speed and accuracy.
By the end of the year we had reduced sign-up and transfer-in process lead
times by up to five days, introduced smart forms to capture client data
accurately first time, deployed AI to client-facing mailboxes to filter
requests more efficiently, and established new roles to support clients
transferring from third-party platforms. We also refreshed our segmentation
model to ensure our service model better supports our clients' needs.
These changes yielded results: in the second half of 2024, our average
speed-to-answer was consistently under one minute, while our customer
satisfaction score (CSAT) and service net promoter score (NPS) steadily
climbed throughout the year, achieving averages of 91% and 34 respectively.
The latter marked a significant improvement on 2023's average NPS of 16.
Enhanced products and proposition
We also introduced several new investment options during the year to enhance
our client offering. In February, we launched our Money Market Managed
Portfolio Service (MPS) in response to client demand to provide a low-risk,
MPS alternative to cash products.
The portfolio will be available across all tax wrappers to allow advisers to
access these solutions alongside their existing investment propositions. Given
the ongoing uncertainty in investment markets and some investors' increased
propensity to hold cash, we believe the product is likely to continue to
attract flows.
In July, we launched our integrated cash solutions on Wrap. Cash solutions are
fully embedded into existing platform processes, which makes it simple to
invest and withdraw client money. Not only does this create significant
efficiencies for advisers, it also leads to better client outcomes by
increasing opportunities for portfolio diversification and enabling money to
be transferred more quickly between cash and investment products. A wide range
of competitive cash accounts is available to ensure customers have access to
deals that are among the most competitive on the market.
In December, we launched our ESG Hub analytics tool on Wrap to enable advisers
to hold more informed conversations with their clients about their portfolios'
ESG characteristics. The tool enables advisers to record their clients' ESG
preferences and manage their portfolios accordingly, including the ability to
assess ESG data at stock and portfolio levels. It can also generate tailored
ESG reporting in a client-friendly PDF format. Information is sourced from
leading ESG data providers and the feature is available at no additional cost.
Continue to improve platform and pricing
One of our most significant developments in 2024 was to simplify Wrap's
pricing structure. Key changes included lowering fees and reducing the number
of pricing tiers. Combined, these changes mean our platform provides a highly
competitive price offering that we believe leaves us well-placed to attract
and retain client assets.
The changes were made possible by the technology upgrades we have implemented
in recent years, with the creation of servicing efficiencies allowing us to
pass these savings on to our clients. Lower fees were made available to new
customers in 2024, while the new fee structure to existing customers was
delivered in February 2025.
1. Fundscape Q4 Press Release, January 2025, AUMA as at 31 December 2024.
Significant investment in people
During the year, we made key organisational changes and appointments to ensure
that we have the right structure and leadership in place to drive improvements
in our client service and proposition to return the business to growth.
We announced three senior hires to build what we believe is among the
strongest leadership teams within the adviser platform market. In October,
Verona Kenny joined in the newly created role of Chief Distribution Officer
(CDO). A senior leader in the platform industry over many years, Verona will
shape the vision for and lead our sales strategy, with executive
responsibility for managing client relationships across our strategic
partnerships and regional accounts.
Following Verona's appointment, we strengthened our sales team by establishing
a strategic relationships team, which is responsible for building lasting
relationships with the largest regional firms, consolidators and networks. We
also combined our sales and marketing teams to sharpen our take-to-market
focus and further invested in our people by launching a structured, 22-week
training programme available to all sales team members.
In November, Derek Smith joined in another newly created role, Chief Product
& Technology Officer. Under his leadership, our product and technology
teams have been combined, with Derek responsible for executing our technology
strategy and ensuring the continuous enhancement and scalability of our
offering.
We are also recruiting product, engineering and data professionals to help us
create market-leading digital products, services and experiences to support
our clients' growth.
Most recently, in January 2025, Louise Williams joined as the business's new
Chief Financial Officer. Louise brings extensive experience as a senior
executive driving transformation and robust financial governance, and her role
will be key to ensuring we deploy capital efficiently and achieve our
business's growth ambitions.
Opportunities for growth
Market opportunity:
- UK has a large economy with an ageing population undergoing a £5.5tn
intergenerational wealth transfer over the next 25 years(1).
- Platform market AUMA is expected to grow at 13% p.a. to 2029(2).
- The UK has a savings and advice gap of over 20m people(3). The advice
industry will need to increase capacity and efficiency to help reduce this
gap.
How are we positioned for growth?
Our strategic growth plan comprises four key pillars:
- Price: We now offer even more competitive platform fees, and we're
leveraging our cost efficiencies to pass on savings to clients.
- Product: We are investing in our proposition with a clear focus on
increasing integration and digitalisation and optimising core processes. We
expect this to enhance our ability to create innovative solutions that drive
efficiencies for clients and improve service experience.
- People: We have invested in our leadership team, service and sales team to
deliver for our clients.
- Service: We are continuing to improve our service to help clients focus on
serving their end customers. We are re-engineering client journeys to make
things faster and simpler. We are offering new approaches to meet clients'
needs however they interact with us. We have also bolstered our client
services team with new hires to give even more support to advisers.
1. Source: Kings Court Trust.
2. Source: Fundscape Q4 Press Release, January 2025. AUMA as at 31 December
2024.
3. Source: Boring Money and Yorkshire Building Society.
Our strategy in action
Strengthen talent and culture
Adviser invested in its people through senior hires and organisational changes
in 2024. Our three new leadership team members highlight how they are looking
to build talent and culture within the business to drive our return to growth.
3
new senior leadership hires
4
new types of role created to further
enhance our service
9
point increase to 61% in Pulse employee
engagement score from May to November
"By adding three new senior hires, I believe we have created the best
leadership team in the market. Combined with wider changes across the
business, we are building a culture focused on delivering success and
empowering people so that they can thrive."
Noel Butwell, CEO, Adviser
Strengthening our leadership team
Name: Verona Kenny
Role: Chief Distribution Officer
Profile: A senior leader in the platform industry with many years of
experience, Verona joined abrdn Adviser from 7IM, where she was Managing
Director, Intermediary.
Joined: October 2024
How does talent and culture translate to our client experience?
"Clients can always recognise if a business has a client-focused
organisational culture. Culture comes from the top down but also, critically,
it must go across the business. It influences every client interaction, not
only in our distribution function, but through everyone in the business.
That's why we, as a leadership team, are focused on creating a clear sense of
purpose and engaging people in our strategy across the entire business. We
have a hugely talented and committed team of people, and everyone will play an
important role in delivering for our clients."
Name: Derek Smith
Role: Chief Product & Technology Officer
Profile: A leader in creating innovative digital solutions, Derek joined the
business from Morningstar Wealth, where he was Chief Technology Officer. He
previously served in head of engineering roles at Virgin Money and Lloyds
Banking Group.
Joined: November 2024
How will talent and culture initiatives drive our technology and product
solutions?
"Investing in the talent and culture of our teams empowers us to foster
innovation and agility, equipping them with the skills necessary to create
cutting-edge product and technology solutions. By cultivating a culture of
accountability and empowerment, we enable our teams to deliver seamless,
integrated experiences for advisers, ultimately driving business success and
market leadership."
Name: Louise Williams
Role: Chief Financial Officer
Profile: A senior executive with a focus on change, transformation and robust
financial governance, Louise's career spans decades in asset and wealth
management, including at Quilter and BNY.
Joined: January 2025
How important is talent and culture to Adviser's success?
"We have a clear focus on creating alignment, both across the Group and within
the Adviser business. That talent and culture is one of the Group's three
strategic priorities speaks volumes. I've been extremely encouraged to see the
strength of the business's foundations, particularly in terms of the depth of
our talent. Now that we have the right structure and a new leadership team in
place, we're well-positioned to make that happen and to move forward
together."
Investments
Xavier Meyer
CEO, Investments
#1
net sales among UK fund managers in passive fixed income(1)
£25.5bn
I&RW(2) ex-liquidity gross inflows
(+31% vs 2023)
£84m
annualised cost savings achieved
Investment performance
1 year
77%
(2023: 55%)(3)
3 years
60%
(2023: 51%)(3)
5 years
71%
(2023: 58%)(3)
1. Broadridge data, as at 31 December 2024.
2. Institutional & Retail Wealth.
3. The scope of the investment performance calculation has been extended to cover
all funds that aim to track or outperform a benchmark, with certain assets
excluded where this measure of performance is not appropriate or expected.
2023 comparative has been restated.
In 2024, we made significant progress in our Investments business's turnaround
and implemented key changes to our leadership team and organisational
structure to position ourselves for a stronger, more competitive future.
Against a challenging industry backdrop, our fundamentals have improved. We
delivered a material increase in our investment performance and net flows,
combined with reduced costs that reflect our efforts to modernise our
operating environment.
While these are notable achievements, we recognise that we still need to do
more to live up to the standards of excellence that both we and our clients
expect.
In my new role as CEO, my focus is to put strengthened performance, stability
and improved client service at the heart of everything we do.
As a specialist asset manager, we aim to deliver reliable, outcome-oriented
solutions by leveraging our many strengths and differentiators.
There are many pockets of growth opportunities available for an active asset
manager. We are reinforcing our business and channelling resources into our
core areas of expertise - Public and Private Credit, Specialist Equities, and
Real Assets. At the same time, we are continuing to capitalise on our unique
client solutions, especially for Insurers, Closed-End Funds and Wealth
Platforms.
I am humbled to lead a business with such a strong heritage, filled with
extremely talented people, at such a critical inflexion point in our journey.
I am confident that, by sharpening our strategic focus and continuing to
transform our costs and processes, we can successfully deliver sustainable
growth for our business and clients.
Our strategic overview
We are pursuing a return to growth in focus areas, while improving efficiency.
Who we are
Our ambition As a specialist asset manager, we aim to help clients achieve
their target investment outcomes by identifying investment
opportunities to benefit from trends today and beyond
Key capabilities and offerings Specialist strategies Wealth and institutional solutions
Who we serve Institutional clients with Private investors globally
bespoke needs
Strategic focus Focus on areas of expertise Drive better investment performance Enhance our operating model
We are a specialist asset manager with £369.7bn in AUM. We focus on areas Diagram removed for the purposes of this announcement. However it can be
where we have both the strength and scale to capitalise on the key themes viewed in full in the pdf document
shaping the market, through either public markets or alternative asset
classes.
AUM Adjusted operating profit
2023 2024 2023 2024
£366.7bn £369.7bn £50m £61m
Our progress in 2024
Significant progress despite a challenging environment
Although the active management industry continued to face challenges in 2024,
there was a marked improvement over the previous year, both in terms of flows
and investment performance. In 2023, global active mutual funds had
experienced net outflows of £569bn, the second worst year on record. While
2024 was still subdued, industry net outflows of £197bn(1) indicated that
reduced inflation fears had gradually tempted investors back into the market.
Nevertheless, market behaviour still suggested a safety-first approach.
Government bond yields remained sensitive to headwinds, with US Treasuries
reversing their previous gains between September and the end of the year as
the Federal Reserve signalled a slower pace of rate cuts. Within risk assets,
performance was largely concentrated in proven winners, notably the US S&P
500 stock market index and, more specifically, its Magnificent 7 constituents.
Our Investments business's performance echoed this backdrop, with improvements
in flows and investment performance. Overall, net outflows were £4.0bn in
2024; however, this represented a positive swing of £15bn compared to 2023.
Encouragingly, net flows from institutional, retail and wealth clients
improved by £18.2bn to a net inflow of £0.3bn as we benefited from our
increased strategic focus on providing solutions in areas experiencing greater
client demand.
We also improved investment performance in 2024, advancing our strategic aim
to provide clients with valued outcomes. Over one year, 77% of our AUM
delivered returns in line with or above their benchmarks in 2024 (2023:
55%(2)), while three-year and five-year performance were also stronger at 60%
(2023: 51%(2)) and 71% (2023: 58%(2)). This was in no small part due to
enhancements we made to our organisational and investment processes during the
year.
Improved investment performance
Our fixed income and multi-asset strategies performed better than last year
over one-, three- and five-year periods, while alternatives, liquidity and
quantitative index solutions ('quants') delivered strong returns, having also
done so in 2023. Equities improved over one year, but still lagged over three
and five, while real assets performance was mixed.
Over 90% of our AUM in alternatives, liquidity and quants delivered returns in
line with or above their benchmarks across one-, three- and five-year periods.
Our alternatives and fund-of-hedge-fund strategies were among those that
delivered exceptional relative returns. In Quants, the Enhanced Index range
continued to outperform, with the multifactor approach delivering well across
all regions. The index strategies also continued to track well within expected
ranges.
Fixed income performance remained strong, with 83% of AUM performing over one
year (2023: 81%), 90% over three years (2023: 75%) and 93% over five years
(2023: 84%). Credit, emerging markets (EM) and US municipal bonds remained
particularly strong.
Multi-asset saw the strongest improvement versus 2023, with the benefits of
our process enhancement programme materialising. One-year performance stood at
85% of AUM (2023: 12%), which fed through to three- and five-year performance
of 36% (2023: 15%) and 71% (2023: 22%) respectively. Our Diversified Assets
funds performed well versus their peers, as did the majority of our MyFolio
range's AUM. Elsewhere, improvements in tactical asset allocation benefited
some of our larger balanced mandates.
Within real assets, one-, three- and five-year performance stood at 30% (2023:
30%), 46% (2023: 56%) and 56% (2023: 45%) respectively. The majority of these
strategies seek to outperform long-term inflation-linked or absolute return
benchmarks, which has proven a headwind to relative performance over more
recent periods. However, we saw encouraging performance in direct real estate
in 2024, where more than half of our AUM outperformed real estate market
indices over one-, three- and five-year periods, reflecting stronger UK and
Living performance.
It was another challenging year for the industry in equities, with only 31% of
actively managed funds outperforming in 2024(3). Notably, rate-cutting and
election cycles, geopolitical risks and the Magnificent 7's concentrated
outperformance presented challenges for stock pickers.
Our equities performance was similarly impacted by these factors. In developed
markets, the Magnificent 7's outperformance remained a headwind for our active
strategies, particularly those with a yield focus. Our AUM bias towards Asia
and EM also held back overall equities performance. More positively, our
European income, EM income, India and Tekla strategies continued to perform
well. Our small cap fund range also recovered during the year, benefiting from
some of the improvements we delivered to our investment processes.
Reduced outflows through strategic focus
At an AUM level, our asset class mix increasingly reflects our efforts to
sharpen our investment specialisms, optimise our geographic footprint, drive
growth through our strategic partnerships and provide client-centric
solutions.
We are one of the largest providers of closed-end funds globally, while our
quants business is building scale through our relationships with Phoenix and
other clients. We continue to believe in the long-term potential of Asia and
EM, despite near-term headwinds.
Within Institutional & Retail Wealth, asset classes with positive net
flows in 2024 included liquidity solutions at £5.0bn (£8.7bn higher than in
2023) and quants with £3.6bn (£2.5bn higher than in 2023). Real asset flows
were also slightly positive at £0.8bn (£1.1bn higher than in 2023), while
fixed income flows were flat (£4.0bn higher than in 2023). According to
Broadridge, we were the number one fund manager in the UK for passive fixed
income net sales in 2024.
Unfortunately, we continued to experience challenges in equities, with net
outflows of £7.9bn (£0.7bn larger than in 2023) driven mainly by Asia and EM
outflows of £3.1bn and £2.5bn respectively. Meanwhile, multi-asset net
outflows improved by £1.7bn to £1.5bn.
Modernising our business to improve efficiency and outcomes
In 2024, we increased efforts to transform and modernise our business to
improve our client offering. Overall, we delivered £84m in annual cost
savings, which means we are on track to deliver on our cost transformation by
2025.
Our continued investment in technology, AI and data enhancements has helped us
to eliminate non-core and repetitive processes, freeing colleagues to focus on
servicing clients. We strengthened over 250 processes in 2024, including
centralising research processes and simplifying investment frameworks,
alongside launching our performance cockpit, bringing benefits across the
investment floor.
We also continued to improve client engagement through our new abrdn Gather
conference, Asia Sustainability Week and Insurance Roundtables.
1. Broadridge data, as at 31 December 2024.
2. The scope of the investment performance calculation has been extended to cover
all funds that aim to track or outperform a benchmark, with certain assets
excluded where this measure of performance is not appropriate or expected.
2023 comparative has been restated.
3. Manager Versus Machine; AJ Bell, Morningstar; December 2024. Data as at 30
November 2024.
Transforming our business
2024 highlights:
- On track to achieve 2024 cost transformation targets.
- 250 processes simplified.
- Fund rationalisation nearly complete, with process for ongoing review
established.
- Unlocked savings and value in our service model by building relationships
and renegotiating contracts.
- Ongoing optimisation of tech and data stack.
- Upgraded and scalable systems and tools.
- High impact marketing and distribution.
2025 priorities:
- Focus on our strengths and growth opportunities - Credit, Specialist
Equities and Real Assets.
- Improve investment performance by investing in the right people, processes
and technology.
- Enhance our operating model with our partners to improve agility and scale
efficiently.
- Complete cost transformation.
Opportunities for growth
We have identified four industry mega trends to which we are aligning our
business:
1. Democratisation of finance and digital innovation
- Governments shifting responsibility for savings and investment to
individuals.
- Investors require broader range of asset classes, including private assets.
- Digital innovation transforming investment platforms and asset allocations.
- We are: promoting our best performing credit products; enhancing our managed
wealth and MPS solutions, including enhanced indexing; expanding our
alternatives offering; and embedding trends in specialist equities, including
small- and mid-caps.
2. Ageing populations and improving health
- Structural growth in pension assets.
- Increased expenditure to support longer, healthier lives.
- We are: serving investors with asset allocation, income, and liability
matching solutions; increasing our real assets capabilities; and building our
thematics expertise.
3. Growth of Asia and EM
- Regional GDP expected to continue outgrowing Western economies.
- We are: providing access to Asia and EM with our strong existing footprint
and capabilities.
4. Ongoing energy transition
- Real assets growth driven by energy transition.
- Investments growth driven by infrastructure spending, public transport
electrification, waste management and digital fibre networks.
- We are: serving the growing demand for alternatives, real assets and
sustainability through significantly expanded capabilities.
Our strategy in action
Transform performance
abrdn Core Infrastructure is funding the essential upgrade of UK railway
rolling stock. Our investments continue to generate stable, long-term
cashflows for clients, while strengthening our ability to capture future
sustainable growth opportunities.
>10%
of UK passenger rolling stock funded by our investments
>£2.4bn
investments in UK rolling stock led by abrdn
#1
East Anglia fleet ranked top-performing rail investment globally in GRESB 2024
Sector Leaders assessment
"Our successful 10-year partnership with Rock Rail exemplifies our strategy of
identifying and unlocking incremental value in core infrastructure assets. The
delivery of four rolling stock fleets has expanded our presence in the
transport sector and enhanced our reputation as a strategic, long-term partner
in infrastructure investment, which the UK government has identified as
priority for economic growth."
Dominic Helmsley, Head of Infrastructure, abrdn
Strategic partnership to transform UK railways Stable, long-term cashflows
Over the past 10 years, abrdn has led over £2.4bn in investments to upgrade These infrastructure assets offer a robust return profile, which includes
four fleets across the UK's railway network, accounting for over 10% of stable cash yields from the outset and downside protection against
passenger rolling stock. These investments have been made end-customer demand risk. The investment case is compelling - rolling stock
provides long-term, stable cash flows while enhancing mobility, reliability,
in partnership with Rock Rail, a specialist railway infrastructure developer, safety, and passenger experience.
through two of our flagship direct core/core-plus infrastructure funds.
Driving our sustainability commitments Capitalising on structural growth
Investing in the UK's rolling stock offers our clients valuable exposure to We believe this is one of the most exciting periods for infrastructure
essential infrastructure, which is pivotal to decarbonising the transport investing in recent history, as governments in both developed and developing
sector. economies look towards the asset class to stimulate growth and adapt to
long-term, structural trends.
In 2024, the Rock Rail East Anglia and Rock Rail Moorgate fleets were named as
global Sector Leaders for rail by GRESB, achieving scores of 100/100. We are well-positioned to capitalise on these opportunities, thanks to our
extensive capabilities in both infrastructure debt and equity, which will
support abrdn's strategic growth in the real assets sector.
Sustainability strategy
Taking a three-pillar approach to risks and opportunities
Inclusive Responsible business Environmental transition
growth Compliant Climate
Social mobility Commercial Nature
Inclusion
Our sustainability ambition is to enable inclusive growth and a credible
environmental transition for our clients, people and tomorrow's generation. We
believe this is responsible business.
We aim to consider sustainability when determining our corporate strategy and
commercial initiatives. Our disclosure is aligned to recognised guidance
frameworks and considers the interests of our various stakeholders.
We support our clients and customers to manage the long-term risks and
opportunities associated with the environmental transition and inclusive
growth. We analyse sustainability opportunities to ensure a balance between
short-term costs and long-term benefits. Our strategy is not static and will
be iterative in response to the changing landscape: macro-economic, regulatory
and scientific.
Our strategy is supported by measurable metrics, with progress evaluated and
verified:
Jason Windsor, CEO
"Building a sustainable business helps us to achieve our purpose: to enable
our clients to be better investors. Sustainability is not only about managing
risks, but also capturing opportunities. It supports our strategic priorities
to transform performance, improve our client experience and strengthen talent
and culture. Strong corporate citizenship is an important foundation of our
business. Our sustainability strategy focuses on the areas where we can make
the greatest material impact and aligns to long-term value creation."
Highlights
Gender Ethnicity
40%(Δ) female 7%(Δ) ethnic
representation at minority
senior leadership representation
at UK senior
leadership
6ppts increase in female representation in our global senior leadership On track for our 2027 target for UK senior leadership ethnic minority
population (CEO-1 and 2) to 40% representation
(Δ) 2024 data with this symbol is subject to Independent Limited Assurance in
accordance with ISAE(UK)3000 and ISAE3410 by KPMG. See page 300 for more
detail.
Social mobility Environmental transition
£2.2m 74% reduction
total charitable in operational
contribution emissions versus
2018 baseline
including donations to charities and in-kind 45% reduction of in-scope public markets(1) portfolio carbon intensity versus
2019 baseline
giving
1. Includes a subset of in-scope assets across equities, fixed income,
2. and active quantitative strategies. See page 57 for more detail.
Sustainability progress
In 2024, building on our strong foundations as shown below, we focused on
discovery, aligning goals, and establishing and embedding a strategy that can
adapt with the dynamic sustainability landscape. In 2025, we will continue to
progress against all three of our sustainability strategy pillars, with a
strong focus on maintaining and maturing our approach to inclusive growth. We
also aim to deliver meaningful impact on the environmental transition by
setting new medium-term targets on climate and further maturing our approach
to nature.
Pre 2020 2021 2022 2023
2020
An accredited UK Living Wage employer since 2014 One of the first companies to be accredited as a Living Hours employer Published 'Human Rights - Our approach for investors' Announced a three-year partnership with UNESCO via abrdn Charitable Foundation Partnered with The Alan Turing Institute (via aCF)
Operational emissions baseline (2018) First annual diversity, equity and inclusion (DEI) client report First year climate scenario analysis research published (aCF) Became a Disability Confident Employer
Entered Bloomberg Gender Equality Index, and Equileap top 200 companies for Published our first TCFD-aligned report Published our first real estate net zero investment framework Strengthened accountability by increasing DEI metrics in executive scorecards 100 Women in Finance EMEA Industry DEI award
gender (2019) First reported portfolio emissions intensity for equities and fixed income First roll-out of carbon metrics reporting for clients Strengthened accountability by increasing climate metrics in executive Year 2 of engagement with our top suppliers on their approach to net zero
Six employee inclusion networks, three regional networks comprising 2,000+ Launch of our carbon foot-printing tools for investment desks Published our first Stewardship Report scorecards targets
colleagues (2019) Launch of engagement strategy focused on highest financed emitters Net Zero award from Scottish Financial Enterprise for our research identifying
Portfolio emissions intensity baseline (2019) Published 'Preserving Natural Capital - Our approach for investors' climate transition leaders
Published climate change approach document for Investments (2019) ii ACE40 list launch ESG fixed income fund of the year award from Environmental Finance
ii wins AIC Shareholder engagement award, supporting retail investors to
engage with their investments
Group Double Materiality Assessment performed
2024 2025 2030 2040
Launch of Target date for 50% reduction in operational emissions versus 2018 baseline Target date for 50% reduction of in-scope portfolio carbon intensity versus Target date for operational net zero
2019 baseline
new Senior
Leadership
(UK) ethnicity target
Scottish Diversity
Awards - Diversity campaign of the year
Completed two-year engagement programme with our top 20 largest financed
emitters
74% reduction in operational emissions versus baseline
45% reduction for in-scope public market portfolio carbon intensity versus
baseline
34% reduction for in-scope real estate portfolio carbon intensity versus
baseline
Adviser launch ESG Hub
ii named 'Shareholder Engagement Champion'
One of the first companies to be accredited as a Living Hours employer
First annual diversity, equity and inclusion (DEI) client report
Published our first TCFD-aligned report
First reported portfolio emissions intensity for equities and fixed income
Launch of our carbon foot-printing tools for investment desks
Published 'Human Rights - Our approach for investors'
First year climate scenario analysis research published
Published our first real estate net zero investment framework
First roll-out of carbon metrics reporting for clients
Published our first Stewardship Report
Announced a three-year partnership with UNESCO via abrdn Charitable Foundation
(aCF)
Strengthened accountability by increasing DEI metrics in executive scorecards
Strengthened accountability by increasing climate metrics in executive
scorecards
Launch of engagement strategy focused on highest financed emitters
Published 'Preserving Natural Capital - Our approach for investors'
ii ACE40 list launch
Partnered with The Alan Turing Institute (via aCF)
Became a Disability Confident Employer
100 Women in Finance EMEA Industry DEI award
Year 2 of engagement with our top suppliers on their approach to net zero
targets
Net Zero award from Scottish Financial Enterprise for our research identifying
climate transition leaders
ESG fixed income fund of the year award from Environmental Finance
ii wins AIC Shareholder engagement award, supporting retail investors to
engage with their investments
Group Double Materiality Assessment performed
2024
2025
2030
2040
Launch of
new Senior
Leadership
(UK) ethnicity target
Scottish Diversity
Awards - Diversity campaign of the year
Completed two-year engagement programme with our top 20 largest financed
emitters
74% reduction in operational emissions versus baseline
45% reduction for in-scope public market portfolio carbon intensity versus
baseline
34% reduction for in-scope real estate portfolio carbon intensity versus
baseline
Adviser launch ESG Hub
ii named 'Shareholder Engagement Champion'
Target date for 50% reduction in operational emissions versus 2018 baseline
Target date for 50% reduction of in-scope portfolio carbon intensity versus
2019 baseline
Target date for operational net zero
Sustainability governance
Oversight and management of identified risks and opportunities
Roles and accountabilities
Our framework
We use a governance framework aligned to the UK Corporate Governance Code's
(2018) principles. Our Board oversees the implementation of the Group's
business model and the activities of our three businesses: ii, Adviser and
Investments. This includes oversight of material sustainability matters
relating to our business model and strategy.
Board and its Committees
Our Board approves the Group sustainability strategy, with the Audit Committee
providing oversight of sustainability reporting, and the Nomination and
Governance Committee providing oversight of our Talent agenda, including DEI.
Executive Directors
The Board delegates responsibility for sustainability matters to the Chief
Executive Officer who, alongside our Chief Financial Officer, is incentivised
through our Executive Remuneration Policy to achieve sustained performance
against our public sustainability targets.
Executive Leadership Team
Our sustainability ambition, plan and actions are led by our Executive
Leadership Team (ELT) and progress is measured through the ELT scorecard.
Executive Sustainability Committee
In 2024, the Committee - comprising executive representatives from our
businesses and corporate functions - met to discuss and provide
recommendations to the Chief Executive Officer on sustainability matters. In
2025, we have elevated sustainability to become a standing item at ELT
meetings to ensure strategy input from the full executive team. The Committee
has been repurposed into a Group Sustainability Strategy Forum.
Embedded sustainability expertise
Our Group General Counsel, Group Head of Sustainability, and corporate
sustainability team lead the management and delivery of our sustainability
plans and actions. Our Investments business has a central sustainable
investing team, led by our Chief Sustainable Investment Officer, as well as
dedicated asset class specialists. Our Chief People Officer, Colleague
Experience Director and colleague experience team manage the Group's culture
plans and actions.
Colleague networks
Our Colleague Council, established in 2024, brings together all aspects of our
colleague voice. Our colleague networks support colleagues to play a role in
shaping our culture. Our ELT provides sponsorship for the Colleague council
and each network.
Our people
Our global Code of Conduct describes the principles and standards to which we
hold ourselves. We ask all of our colleagues to consider these principles in
every decision and action they take.
Board of Directors
Board Committees Audit
Remuneration
Nomination and Governance
Risk and Capital
CEO Group Operating Committee ELT
Executive Sustainability Committee
Thematic Working Groups (convened as required)
Group Sustainability
ii Adviser Investments
Climate change governance
Oversight of risks and opportunities
Oversight of climate-related risks and opportunities is integrated in our
sustainability governance structure. In 2024, the Board and its Committees
were regularly informed about climate-related issues. They also reviewed our
sustainability strategy, including a focus on the environmental transition.
Our Audit Committee provided ongoing oversight of non-financial disclosure
requirements.
Integration with Enterprise Risk Management
Climate-related risk is integrated within our Enterprise Risk Management
Framework, which is subject to Board oversight. Climate change is considered
among our principal risks and uncertainties, specifically within our
'Sustainability' principal risk. We consider climate risk to be material and
acknowledge its relationship with financial, regulatory and legal risk, but
note that it is also a standalone risk.
Management of risks and opportunities
Our Chief Executive Officer delegates authority from the Board to our ELT. We
have established several different forums and working groups to manage the
integration of sustainability, including climate change, across the business.
These groups ensure the implementation of our strategy and actions to mitigate
risks and identify opportunities, and are key in identifying matters to be
escalated through our governance structure.
Read more in our Sustainability and TCFD report 2024.
Inclusive growth
We believe that everyone - our clients, customers, people and communities -
should have the ability and confidence to achieve financial security. By
bringing diverse perspectives and ways of thinking into our workplace, we are
well-positioned to support our clients and customers who face increasingly
complex financial challenges.
Social mobility
We are committed to building a business that supports social mobility and
financial well-being for our clients, people, communities and tomorrow's
generation. We believe we can achieve our ambition through supporting
financial education, community impact, fair work and ensuring our offerings
are accessible to all.
For more on social mobility, see pages 46-48.
Inclusion
We are committed to creating a more inclusive organisation that attracts
brilliant talent, where all our people can thrive, where they belong, and can
learn, develop and do their best work.
For more on inclusion, see pages 49-52.
£2.2m
Total charitable contribution including donations to charities and in-kind
giving (2023: £2.1m)
3,301 hours
Our colleagues recorded 3,301 hours of volunteering time, a 2% increase versus
2023 (2023: 3,248 hours)
31%
Proportion of minority ethnic representation in recruited graduate positions
(UK) (2023: 19%)
+6ppts senior female representation
Female representation in our global senior leader population (CEO-1 and 2)
increased by 6ppts to 40%(Δ) (2023: 34%).
∆ 2024 data with this symbol is subject to Independent Limited Assurance in
accordance with ISAE(UK)3000 and ISAE3410 by KPMG. See page 300.
Kristina Church
Group Head of Sustainability
"We are dedicated to helping our clients and customers secure their financial
futures through effective planning, saving, and investing. By championing
inclusive growth, we aim to break down barriers and create equal
opportunities, supporting our stakeholders to achieve their potential. We do
this through our partnerships with leading charities, attracting brilliant
talent, creating a diverse supply chain, and through the products and services
we provide to our clients."
Social mobility - accessible offerings and fair work
Supporting our customers, clients and colleagues to achieve financial security
Accessible offerings
ii
We believe that investment platforms can be a powerful force for good, when
they put customer interests at the heart of their pricing. ii's flat-fee
structure differentiates it from many other investment platforms and can make
its services more cost-effective and accessible to a broader range of
investors.
In the latest iteration of ii's Great British Retirement Survey 2023, we found
there is a self-employment crisis - three quarters (76%) of the self-employed
are paying nothing into a state pension, and 38% don't have a pension at all.
This highlights the urgent need in the market for more accessible and
cost-effective retirement products.
Our Pension Essentials, launched in 2023, is an entry-level plan for UK
savers, aimed at bringing self-invested pensions to the mass market. As higher
living costs continue to challenge peoples' ability to save for a comfortable
retirement, this product is an example of how investment platforms can make
pensions more accessible to a broader range of investors.
Adviser
Support for customers in vulnerable circumstances
We support advisers to achieve the best outcomes for their clients, which
includes additional support for customers in vulnerable circumstances.
The FCA identifies four key drivers of vulnerability: health, life events,
resilience, and capability. Through our Client Engagement Hub, we aim to
provide support and tools for clients with vulnerabilities and aim to make
processes as accessible and effortless as possible.
We have a team of specialists who are trained to provide additional help when
a vulnerability is identified. Our accessibility services also support
additional needs. We can translate certain documents into braille, or large
print, and we can accept calls from registered sign language interpreters, or
through RelayUK, which enables users to type to talk.
Through our proactive focus on training, technology and collaboration, our
goal is to provide best-in-class support for our customers and clients who
find themselves in vulnerable circumstances.
Fair work
Living Wage and Living Hours
We have been an accredited UK Living Wage employer since 2014. In 2020, we
were one of the first companies to be accredited as a Living Hours employer.
We ensure all our UK colleagues (over 80% of our global workforce) are paid
above, or in line with, the UK Living Wage and that all colleagues are paid
above the minimum wage in their country of work. In the UK, we extend this
commitment to third-party suppliers working on our premises and our
Global-Third Party Code of Conduct details our linked expectations for any
global third-parties that we work with.
Also overseen by the UK Living Wage Foundation, the Living Hours accreditation
provides greater security for workers. Living Hours are intended to help
combat insecure work across the UK.
Case study
Living Wage advocacy
We continue to play a leading role in advocating for the Living Wage through
our participation in three working groups of the Living Wage Foundation, in
support of both the Living Wage and Living Hours. In 2024, we joined a working
group with a leading sustainability ratings agency to support discussions
aimed at raising awareness of, and expanding engagement with, the Living Wage
accreditation scheme through their networks.
Social mobility - supporting financial education
Powerful charitable partnerships
Across the UK, we are directly supporting organisations championing financial
education and inclusion through the abrdn Charitable Foundation, a registered
charity in Scotland (SC042597). We have committed to multi-year partnerships
with MyBnk and WorkingRite, which are delivering financial education and
employability programmes designed to address systemic barriers and to support
financial inclusion for young people. We see this as integral to our inclusive
growth sustainability approach, as our contributions empower tomorrow's
generation to secure their financial futures.
£1.1m
Donated to charities aligned to breaking down barriers to employment and
financial wellness (2023: £0.7m)
Case study
The Savings Ladder
In 2024, we launched our 'Savings Ladder' campaign to get Britain investing.
Our campaign highlights the growing need for the nation to embrace a 'savings
ladder' culture where saving, investing and pensions become a bigger part of
how people view their finances.
We have measured this through the development of a 'Propensity to Save and
Invest' score, with our first 'Index', published in July 2024, finding that
the UK's average is 45/100. This is further supported by our research, with
44% of poll respondents classified as having poor financial literacy, based on
answers to questions developed by the Global Financial Literacy Excellence
Centre.
This translates to millions of people potentially heading for a less
financially comfortable retirement, which we believe must be remedied by
policy interventions to support financial education. Our open letter to the UK
Government set out our concerns and urged action to boost financial literacy.
To read our open letter, visit www.abrdn.com/annualreport
Delivered with MyBnk
3,869 62%
participants and 231 programmes delivered improvement in financial mindsets and attitudes
Kirsty Brownlie
Senior Social Impact and Partnerships Manager
"Many young people continue to face systemic barriers to achieving financial
security. Acknowledging and addressing these challenges is essential if we
want tomorrow's generation to fulfil their potential. Better financial
education is vital if we are to encourage a culture of investing for the
long-term, with our research suggesting that poor financial literacy is
hampering people's long-term financial health."
Our Savings Ladder Index results
Highlighting the need for urgent action to support financial education in the
UK
45/100 44%
propensity to save and invest of respondents with poor financial
literacy
Social mobility - community impact
Giving strategy
We connect people to opportunities, their communities and the natural world.
We do this through employee engagement and building partnerships through our
charitable giving strategy, governed through the abrdn Charitable Foundation.
Our charitable giving is strategically aligned under two main themes: People,
focused on breaking down barriers to education, employment and financial
wellness; and Planet, protecting nature and addressing the impacts of climate
change.
Colleague initiatives
We actively support our colleagues' passion for contributing to causes and
organisations close to their hearts. We do this through contributing to
colleague giving for both regular contributions through payroll in the UK and
one-time fundraising efforts globally. We encourage colleagues across the
globe to engage with their communities by offering three days of paid leave
annually for volunteering, applicable during and beyond regular working hours.
This approach highlights our commitment to community engagement, allowing us
and our colleagues to make a meaningful impact.
£86k
Payroll giving(1): We match colleague giving through our Give As You Earn
scheme, up to a total of £100 per month. This totalled £86k in 2024 (2023:
£103k). Colleagues donated £174k voluntarily via payroll giving in 2024
(2023: £191k).
£29k
Fundraise Plus(1): We match colleague fundraising through our Fundraise Plus
scheme, up to a total of £200 per person, per annum. This totalled £29k in
2024 (2023: £53k). Colleagues fundraised and donated £121k voluntarily in
2024 (2023: £195k).
1. Funding since 2023 has reduced as a result of lower headcount through
transformation.
Spotlight on: abrdn Innovation Fund
The abrdn Charitable Foundation launched its inaugural Innovation Fund, aimed
at advancing social mobility, combating climate change, and protecting nature.
We invited applications from across the globe from charities and other
non-profit entities that propose compelling solutions to social and
environmental challenges.
The Fund is aimed at supporting them to explore groundbreaking ideas with the
potential to significantly benefit global communities, delivering a lasting
impact.
Our 2024 Innovation Projects include:
- Digital Career Mentoring with Drive Forward, a UK charity that enables
care-experienced young people to achieve their full potential through
sustainable and fulfilling employment.
- 24/7 Digital Library with Institut Louis Germain, a French charity that
breaks down barriers to education, enabling the pathway to academic success
and ambition.
Our 2024 Community Champion
We celebrate extraordinary colleagues and teams for the amazing things they do
inside and outside of work. Our 2024 Community Champion, Peter Tulloch,
volunteers for Blood Bikes, delivering vital blood to those who need it across
Scotland. Peter volunteers for an average of 20 hours per month and can drive
up to 300 miles in a six-hour shift. We are proud of all our colleagues who
give up their time to support their communities.
Diversity, equity and inclusion (DEI)
Caring about our people is the right thing to do for our business and our
clients. We have a strategy and a framework in place to support all our
colleagues at abrdn.
Resetting our strategy and priorities
Our purpose is to enable clients to be better investors. That means all of us,
whoever we are, need to support our clients, whoever they are, to achieve
their investment goals.
In 2024, we reset our strategy and redefined our ambitions to be clear about
what matters to our people and our clients. We have built a framework and an
ambitious plan to support the building of diverse teams who have a blend of
skills, experience and backgrounds. This will help us meet our ambition to
attract brilliant talent, coupled with a culture where all our people can
thrive. We believe this will help create better business outcomes, both today
and in the future.
We have developed a new ambition, clear priorities and an action plan for
2025:
Tracey Hahn
Chief People Officer
"We have made positive progress in 2024, and I'm pleased to see a shift in how
people feel about working here. Supporting and developing our talent, and
building the right culture to enable our people to thrive, is right at the
heart of our strategic priorities. I am really proud of the role all our
colleagues play in working together to deliver the best outcomes for our
customers and clients."
Our ambition
We are committed to building a business that attracts brilliant talent and
where all our people can thrive; where they belong, and can learn, develop and
do their best work.
Our 2024-2025 priorities
Gender Ethnicity Business/Regional
- Supporting and growing our Balance network. - Supporting and growing our Unity Network. - Locally defined and owned, based on data, demographics, and cultural or
regional nuances.
- Mentoring and sponsorship. - Publishing the UK Ethnicity pay gap.
- Continued actions to close the UK gender pay gap. - Working with our new partner for ethnicity.
- Establishing communities of support.
2024-2025 actions to drive change across the agenda
Revitalise our networks and communities Focusing on talent and career actions/progression Inclusive & high performing leadership skills for all leaders Activate sponsorship and mentoring Embed in the end-to-end colleague experience
What we have delivered
Catalyst event, 'Diversifest', for reset of our ambition attended by one in Increase of diversity data disclosure to 76% for Actions across all five 12 real-life colleague stories shared via award-winning internal campaign,
three colleagues
'What you see and the real me'
race/ethnicity areas of 2024 reset:
Client RFPs; data; partnerships; networks; priorities
Read more in our Sustainability and TCFD report 2024.
DEI - gender and ethnic representation
Making progress
Building an inclusive business is underpinned by having the right data,
setting ambitious but appropriate targets and reporting on our progress for
transparency and accountability.
We set our Gender targets in 2016, and met these initial ambitions in 2020.
Our targets and related actions clearly align to our two core priorities of
Gender and Ethnicity. We are taking meaningful actions in both the short and
medium term to drive sustainable change within our business, for all our
colleagues.
In 2024, we introduced a new target for 6% of UK senior leadership
representation to identify as minority ethnic by 2027. Already we have seen
strong progress and momentum, and are on track for this target. This has been
in addition to our increased disclosure among colleagues for race and
ethnicity data.
We are pleased to report that we are on-track for our Board gender target, as
well as our senior leadership targets. We remain committed through our plans
and through our focus on gender as a priority.
Our gender and ethnic representation targets
Target group Gender target 2024 status Ethnicity 2024 status
abrdn plc Board 40% women 40% women Δ Maintain commitment to the UK Parker review recommendation Two Directors identifying as minority ethnic Δ
(1 or more members) (100% disclosure rate)
Senior leadership(1) (CEO-1 and 2) 40% women 40% women Δ Target: 6% UK senior leadership identifying as minority ethnic by 2027 7% UK senior leadership identifying as minority ethnic Δ
(global) (global) (82% disclosure rate)
Global workforce(2) 50% gender balance (+/- 3% tolerance) 43% women Δ
Statement of consistency with the FCA Listing Rules
As of 31 December 2024, 40% of the abrdn plc Board were women, with two
Directors identifying as from a minority ethnic background. Diversity
characteristics are self-reported by Board members and all colleagues. No
senior positions on the Board, as defined by UKLR 16.3.29, were held by women
as at 31 December 2024. No changes to the Board have occurred since then. The
Board continues to support its Diversity Statement. Further detail on pages
99-100.
Board and executive management gender representation Number of Board members Percentage of the Board Number of senior positions on the Board(3) Number in executive management(4) Percentage of executive management
Women 4 40% - 4 27%
Men 6 60% 3 11 73%
Board and executive management ethnic representation Number of Board members Percentage of the Board Number of senior positions on the Board Number in executive management Percentage of executive management
White British or other White (including minority-white groups) 8 80% 3 12 80%
Asian/Asian British 2 20% - 1 7%
Not specified/prefer not to say(5) - - - 2 13%
Subsidiary Director gender representation(6) Number of Subsidiary Directors in 2024 Percentage of Subsidiary Directors in 2024 Number of Subsidiary Directors in 2023 Percentage of Subsidiary Directors in 2023
Women 12 (of 27) 44% 14 (of 30) 47%
Men 15 (of 27) 56% 16 (of 30) 53%
Δ 2024 data subject to Independent Limited Assurance in accordance with
ISAE(UK)3000 and ISAE3410 by KPMG. Assurance statement and
abrdn's detailed reporting criteria included in the Other information
section (page 298) of this report.
1. Senior leadership relates to leaders one and two levels below
the CEO and includes the Company Secretary, but excludes administration roles
and individuals on garden leave.
2. Global workforce of 4,396 (2023: 4,742) including 1,898
(2023: 2,049) women. 24 colleagues without gender data on our people system
are excluded from the headcount data (2023: 63).
3. Current senior positions on the abrdn plc Board are Chief
Executive Officer, Senior Independent Director, and Chair.
4. Executive management team includes direct reports to the CEO
("CEO-1") and excludes administration roles.
5. Includes one individual based in a country where we do not
collect diversity data.
6. Directors of the Company's direct subsidiaries as listed in
Note 44(a) of the Group financial statements and not otherwise classified
above.
DEI - UK pay gap disclosures
Our UK gender and ethnicity pay gaps
Our UK gender pay and bonus gaps
UK gender pay and bonus gaps 2024 2023
Mean pay gap 24.2% 24.8%
Median pay gap 18.0% 18.8%
Mean bonus gap 50.2% 55.3%
Median bonus gap 34.6% 34.6%
What is the gender pay gap
The difference between the average pay of men and women in a company
regardless of the job they do. It is not the same as equal pay. The Equal Pay
Act in the UK legally requires that colleagues working for the same employer
must get equal pay for doing 'equal work' (the same, similar, equivalent or of
equal value).
What do our results show
The data shows that progress is possible. Where we are taking action, we are
seeing some evidence of change. This gives us confidence that we are moving in
the right direction, but we acknowledge that progress is too slow and we need
to do more to drive meaningful change. This is one data point that informs our
actions and plans at abrdn.
Actions we are taking
1 Representation targets Delivering our senior leadership targets will have the greatest impact on the
UK gender pay gap.
2 Industry collaboration Supporting the Diversity Project's goal for firms to reduce their UK gender
pay gap by one-third from 2019 levels.
3 Accountability With oversight from our Nomination and Governance Committee, our ambition is
led by our ELT and includes tracking of progress against culture-related
metrics.
4 Career framework Providing greater transparency of the skills and expectations of people at
each career level within our job families.
5 Keeping gender as a priority across our Talent and Culture agenda Our progressive plan has been in place since 2017 and we continue to shape and
refine our actions based on our data, colleague voices and by working with our
Balance network.
Our UK ethnicity pay gap
UK ethnicity pay gaps 2024
Mean pay gap 12.4%
Median pay gap 15.7%
What is the ethnicity pay gap
The ethnicity pay gap is the difference between the average pay of people of
different ethnicities within the same company, based on self-disclosure of
their race/ethnicity data, regardless of the job they do. Our UK pay gap shows
that, on average, people who identify as Black, Asian or Minority Ethnic earn
12% less than people who identified themselves as White.
What do our results show
This is the first time we are publishing our UK ethnicity pay gap, which we
hope indicates our commitment to action and sustainable change. The data
represents a baseline from which we can track the impact our actions are
having. Ethnicity is a core focus of our strategy and we recognise that there
is a long way to go to create a truly equitable world of work - across the
financial services industry and at abrdn. We are committed to playing our part
in making progress.
Actions we are taking
1 Representation targets We have set targets specifically at UK senior leadership level that will have
the greatest impact on the UK ethnicity pay gap.
2 Career framework Providing greater transparency of the skills and expectations of people at
each career level within our job families.
3 Data collection and accuracy We are focused on data disclosure and gathering the right insight from our
people.
4 Making ethnicity a priority Based on our increased data disclosure and insight, and close engagement with
our Unity network, we are driving more targeted actions.
View or download our standalone UK pay gap report at
www.abrdn.com/diversity-and-inclusion
Colleague engagement
Building momentum and launching a new colleague council
2024 engagement results
While acknowledging that there is room for improvement, we are pleased to see
an increase in colleague engagement to 57% (2023: 54%). Our all-colleague
survey achieved its highest ever participation rate of 83% (2023: 79%),
reflecting our efforts to encourage a culture of feedback from our colleagues,
with over 7,000 comments received during the year.
Reflecting a healthy culture
Pride and advocacy are growing, despite challenging market conditions. Our
underlying culture is healthy, with colleagues reporting strong client focus,
challenging and interesting work, growing belief in leadership and strong
collaborative team relationships.
Taking action
The introduction of our new career framework has contributed to improvements
in colleague perception of career development at abrdn. In 2024, 81% of our
colleagues had a mid-year career conversation with their leader to discuss the
new career framework, future career aspirations and development opportunities.
Focus and work in this area continues to be a priority.
Day-to-day experiences are positive and leaders at all levels have strong and
trusted relationships with their teams. 87% of colleagues say their manager
cares about their wellbeing; 81% feel included by the people they work with;
and 74% say their perspectives are valued, reflecting an emerging strength and
opportunity in our leaders.
Colleague "I can voice a contrary opinion without fear of negative consequences"
engagement 67%
score (2023: 53%)
57% "I believe there are good career opportunities for me here"
(2023: 54%) 44%
"I know how my work contributes to delivering abrdn's strategy" (2023: 36%)
78%
(2023: 68%)
Colleague council
Newly formed in 2024, this global group represents our colleague population,
bringing together all aspects of colleague voice. More than 100 colleagues put
themselves forward, from which 30 colleagues were appointed, including
representation from each business area, every region and each of our colleague
networks.
Advice and input will be sought from this group to help create the best
outcomes for our people. Meeting for the first time in September 2024, our
colleague council has already completed its first mission, resulting in four
new questions in our annual engagement survey and a fresh, myth-busting
approach to communications.
In 2025, our colleague council will work with leaders and their teams, taking
action and empowering others to continue to improve our colleague experience.
Noel Butwell
CEO, Adviser
"We are on a mission so that everyone feels seen, heard and valued and so that
nothing gets in the way of people doing their best work. I was humbled by the
number and quality of applications for our colleague council. This group is
already shaping our culture, and I look forward to continuing to work closely
with them, driving forward improvements together."
Environmental transition
Managing risks and realising opportunities
In the second half of 2024, the Board discussed our Group sustainability
strategy, which included environmental transition as a strategic area of
focus. The directors recognise the importance of managing the risks and
opportunities linked to climate change, nature and the wider environmental
transition. The Board also supports our business to reflect this strategic
focus in a way that best serves our customers and clients.
Under our environmental transition pillar, we consider the impact of, and our
impact on, the environmental transition across the Group, with a focus on
climate and nature.
We continue to actively manage our transition planning and have developed a
Climate Transition Plan internally. This plan is evolving as frameworks and
data mature. We hope to be in a position to publish our plan externally in the
near future.
Identifying and assessing environmental risks and opportunities
Our Corporate Sustainability team works closely with our businesses to
identify and manage sustainability risks and opportunities, which are then
discussed and disseminated in a process managed by our Risk team, in line with
our Enterprise Risk Management Framework (ERMF).
Periodically, we conduct Group environmental risk assessments using our ERMF
risk impact matrix to ensure a cohesive view of environment-related risks and
opportunities for the business.
Residual risk assessment is determined based on a number of factors,
including: the likelihood of the risk materialising; the timeframe of onset;
the scale of the potential impact of each identified risk; the controls we
have to mitigate impact; and business continuity plans aligned to each risk,
all of which help determine vulnerability. The assessment considers inherent
risk and the quality of controls to determine a residual risk score of low,
medium, high or very high, depending on the impact and likelihood attributed
to the risk.
Read more in our Sustainability and TCFD report 2024.
The output of this assessment is shown overleaf, with our most recent
assessment being conducted in November 2024. Our view remains that the Group
is predominantly exposed to climate transition risk (see page 54) and
opportunity (see below), as markets, policies and regulations evolve. This is
most significant to our Investments business as it has the potential to impact
the financial performance of our investments. Adviser and ii do not face the
same level of exposure, due to them being platform businesses.
Identifying opportunities
Across our Group, we aim to support clients in meeting their own
sustainability ambitions. This means supporting our clients to meet their own
sustainable investment goals and navigating the financial implications of the
environmental transition on their investments. We also identify climate- and
nature-related opportunities at both a Group and business level.
At our Climate Risk Workshop in 2023, subject matter experts identified two
over-arching opportunities, which remain unchanged in 2024. These are the
opportunities from developing decarbonising investment products and services
across our three businesses, and reducing operational costs by using more
efficient buildings, technology and transport. The development of specific
products is individual to each business. See page 56 for our operational
approach to decarbonisation.
Investments' approach
We continue to experience strong demand for sustainable investing
opportunities. As such, sustainability and, in particular, climate change
remains a long-term strategic focus for our Investments business. We provide
investment solutions, capabilities and insights to enable our clients to meet
their sustainability and financial objectives.
ii and Adviser's approach
Our ii and Adviser businesses provide information, insight, and access to a
range of sustainable investment solutions.
It is important to be clear that climate- and nature-related considerations
are not integral to every investment, or strategic decision, nor are tools
without limitations. We aim to improve our capabilities each year, as new data
becomes available, and the needs of our clients evolve.
Environmental risks and opportunities
Identified environment-related risks - climate and nature
The table below illustrates our risk assessment of abrdn's environment-related
risks. With input from the first line and Corporate Sustainability, we
consider applicability and expected likelihood across our business. This is an
illustrative view, which is expected to evolve over time.
Identified environmental transition risks Potential financial impact to abrdn Mitigation strategies Applicability to business areas Time horizon Residual risk
Policy and legal Evolving regulatory and reporting landscape, with regional variants Costs to gather, analyse, and publish data Reporting tools and efficient processes Group 0-5 yrs Medium
Costs of inadvertent non-compliance Horizon scanning and engagement supported by governance frameworks Group 0-5 yrs High
Market Changing Reduced revenue from decreased demand for products and services Market research to inform commercial decisions. Thought leadership and client Investments 0-10 yrs Medium
engagement
client/customer preferences
Potential for missed opportunities due to lack of products and services Product development to meet this demand Group 0-10 yrs Medium
Lack of clarity regarding the pace, direction, and evolution of public policy Market uncertainties and associated impacts on returns We have multiple ways to assess potential impacts including on-desk analysts, Group 0-10 yrs Medium
insights from the central investment team and our Global Macro Research team
Environmental events impact the financial markets Volatility reducing revenue and impacting financial performance Investment research to understand and quantify the potential impact on returns Investments 0-10 yrs Medium/High
and build more resilient portfolios
Reactive policies leading to potential market instability Horizon scanning and, where applicable, proactive advocacy with policy makers Group 0-10 yrs Medium/High
Reputational Increased stakeholder concern or negative sentiment Reduced revenue from decreased demand for products and services Enhanced reporting and transparency, and implementation of controls to Group 0-5 yrs High
mitigate marketing risks
Costs associated with potential litigation due to investment decisions Proactive engagement with stakeholders to ensure clear understanding of Investments 0-5 yrs High
regulatory landscape
Identified environmental acute and chronic physical risks
Acute physical Increased severity of extreme weather events and location-specific loss of Costs related to damage to operational infrastructure, technology, and Infrastructure insurance, a business continuity process, remote working Group 0-10 yrs Medium
ecosystem services disruption to power networks. Supply chain disruption and increasing resource technology, distributed infrastructure with backup power, and climate
constraints sensitivity analysis for office locations
Costs and operational impact of non-office- based disruption to Business continuity and remote working support, provision of staff support Group 0-10 yrs Medium
colleagues/third-parties platforms, and requirement for third-party services to provide resilience
plans
Costs of physical damage to investment assets, including real estate Physical climate risks are assessed, mitigated and managed as part of due Investments 0-10 yrs Low/Medium
diligence for new investments and on an ongoing basis as part of asset
management
Climate scenario analysis - Investments
Understanding climate-related risks and opportunities
Beliefs driving our analysis
As investors, we must understand and quantify the effect of climate-related
risks on potential returns of the companies and markets in which we invest on
behalf of clients, and how the underlying assets are addressing their exposure
to climate-related risks. We believe that this will enable us to build more
resilient portfolios and generate better long-term returns for our clients.
Our bespoke approach
We take a bespoke approach with the aim to integrate climate scenario analysis
with our investment processes and provide solutions for our clients:
1 We reflect more realistic regional and sectoral characteristics than standard
approaches.
2 We assign probabilities to our scenarios to create a 'most likely' future
pathway.
3 We design our baseline to reflect what is currently priced into the market.
4 We are not restricted by the technological assumptions of a single
energy-systems model.
5 We consider the impact of company transition strategies and assess their
credibility.
Insights and conclusions
Generally, global climate policy ambition continues to increase, but with
delayed implementation, which is a feature of a 'disorderly' energy transition
and will create nuanced consequences for investors.
We continue to believe that the most pronounced impacts for investors will be
sector- and stock-specific, with valuation impairments for aggregate global
equities being limited (-0.5%) under our Probability-weighted scenario, which
projects a global temperature rise of 2.2°C (2023: 2.3°C). The chart below
plots the dispersion of asset uplifts and impairments under this scenario. Our
framework generates forecasts on over 22,000 equity assets and 55,000
corporate bonds. This analysis can be applied as a top-down tool to support
our clients, with flexibility to meet specific client needs, in conjunction
with other forms of analysis.
Our suite of 16 scenarios allows us to consider the impact of a range of
climate futures from Paris-aligned scenarios of well-below 2°C to a
'hot-house world', with projected temperature rises ranging from 1.3°C to
3.8°C by 2100. But our bespoke scenarios allow us to provide enhanced insight
in the more probable middle-ground.
Resilience of abrdn as a firm
The financial sector faces limited direct exposure to climate-related risks,
with an average equity valuation impairment of 0.5% under our
Probability-weighted scenario. However, climate-related risk has the potential
to be material indirectly, due to portfolio-level exposures, and other risk
types explored on page 54. It is therefore critical that we understand and
quantify climate-related portfolio risks, to better enable the objectives of
our clients, as the owners of the assets we manage. We consider our direct
exposure to climate-related risks to be low. Further information on the
resilience of the Group can be found in our Viability statement on page 80.
Our conclusion is that climate risk and opportunity is both a sector- and
stock-specific phenomenon
This suggests that actionable insights can be found by looking across and
within sectors and implies that actively managed investment strategies can
tilt portfolios towards climate transition 'winners' and away from climate
'losers'. Insights can be refined using our climate 'building blocks', with
both top-down and bottom-up analysis. See more on page 50 of our
Sustainability and TCFD report 2024.
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
Operational emissions disclosure
Delivering against our interim emissions reduction objective
Progress in 2024
Our operational emissions intensity is comparatively small compared with the
intensity of the investments we manage on behalf of our clients. We aim to
lead by example and believe that our actions must mirror our expectations as
investors.
In 2024, we remained on track to meet our interim objective of a 50% reduction
in reported operational emissions by 2025(1). We report a 74% reduction versus
our 2018 base year. This reduction continues to be driven largely by a fall in
our business travel since 2018 and office consolidation.
Actions and initiatives from 2024
Each year, we take action to refine our processes, engage colleagues and
deliver meaningful impacts. In 2024, we carried out net zero audits for some
of our major offices. We engaged with relevant stakeholders required to
deliver the energy efficiency initiatives identified in these audits, and this
process will continue in 2025. This forms part of our work to address our
material operational impacts, such as energy use in our offices. We also
remain committed to addressing broader environmental impacts, as sources of
emissions considered to be less material can still intersect climate and
nature, or may present an opportunity for engagement with colleagues.
Operational climate targets(1)
Target Scope Progress
Operational net zero by 2040 Beginning with absolute emissions reductions, we are targeting net zero 74% reduction since 2018
operational emissions across Scopes 1, 2, and material Scope 3 categories.
50% reduction by 2025 versus a 2018 baseline Absolute reduction in reported Scope 1, 2, and 3 emissions. This does not
include some Scope 3 categories for which data remains unavailable.
Reported operational emissions and energy consumption
Operational emissions in metric tonnes of CO₂ (tCO₂e) 2024 2023 2018
Scope 1Δ(2) 692 739 2,667
Scope 2 (location based)Δ(3) 1,469 1,821 7,069
Total Scope 1 and 2 (location based) 2,161 2,560 9,736
Scope 2 (market based) 426 558 4,376
Scope 3 - Fuel- and energy-related activities (transmission and distribution 168 135 451
losses)
Scope 3 - Waste from UK operations 3 7 -
Scope 3 - Business travel 4,974 6,012 22,031
Scope 3 - Employees working from home 1,035 1,205 -
Total Scope 3 operational emissions Δ(4) 6,180 7,359 22,482
Total Scope 1, 2 and 3 operational emissions 8,341 9,919 32,218
Total energy consumption in kilowatt-hours (kWh '000s)
UK energy consumption 8,841 10,746 26,658
Global energy consumption 2,017 1,812 8,451
Total energy consumption Δ 10,858 12,558 35,109
Operational emissions intensity in metric tonnes of CO₂ (tCO₂e)
Scope 1 and 2 emissions intensity per full-time employee equivalent (FTE)(5) 0.49 0.54 1.57
Reported emissions by location in metric tonnes of CO₂ (tCO₂e)
Scope 1 UK 676 702 2,629
Global (ex. UK) 16 37 38
Scope 2 (location based) UK 1,064 1,275 4,181
Global (ex. UK) 405 546 2,888
Δ 2024 data subject to Independent Limited Assurance in accordance with
ISAE(UK)3000 and ISAE3410 by KPMG. Assurance statement and detailed reporting
criteria included in the Other information section of this report.
1. Operational net zero and interim reduction targets are based on reported Scope
1, 2, and 3 absolute emissions (tCO(2)e) reductions.
2. Scope 1 emissions include natural gas, fluorinated gas, company-owned
vehicles, and stationary fuel.
3. Scope 2 emissions include purchased electricity and district heating.
4. Scope 3 reported emissions do not include some emission categories deemed to
be material but where data is currently unavailable. Refer to page 303.
5. Emissions intensity reporting based on FTE as of 31 December 2024 of 4,409
(2023: 4,719 and 2018: 6,192). In 2024, we improved our FTE coverage to
include contingent workers.
Portfolio decarbonisation - Investments
Targeting a 50% reduction in the carbon intensity of in-scope assets by 2030,
versus a 2019 baseline, within our Investments business
Public markets: progress to date
This is our third year of reporting against our target, with a 45% reduction
in the carbon intensity of in-scope public market assets versus our 2019
baseline in (2023: 41%). In-scope assets include specific funds and mandates
within equities, fixed income and active quantitative strategies, with
demonstrable decarbonisation achieved across each of the asset classes. We
continue to note momentum in an increase in client mandated decarbonisation in
segregated accounts, which has continued to act as an enabler to achieving our
target, along with client inflows into low-carbon quantitative strategies over
the last four years.
Real-world decarbonisation
There remain significant challenges to overcome to achieve real-world
decarbonisation, including favourable policy environments, data availability,
and client demand. Reductions in portfolio carbon intensity may not be
attributable to real-world impact due to the limitations of portfolio carbon
metrics.
Our strategy is focused on having the best possible climate building blocks
and frameworks to enable our clients to integrate climate change
considerations into their investments.
The combination of our top-down climate scenario analysis and bottom-up
portfolio alignment and credibility framework help support
our forward-looking evaluation of emissions and climate-related risks and
opportunities. These frameworks are also deeply integrated into our active
ownership approach to enhance our considerations of climate risks and
opportunities.
Real estate: progress to date
Between 2019 and 2023, we note a 34% reduction in Scope 1 and 2 carbon
intensity by floor area. This can be attributed to the ongoing decarbonisation
of UK and EU energy grids, and the continued evolution of the in-scope
portfolio towards assets with a lower Scope 1 and 2 carbon intensity. This
included an increased allocation towards industrial assets, which typically
have a lower Scope 1 and 2 carbon intensity compared with other asset types
(e.g. offices).
Our analysis of the 2023 calendar year has considered 74% of direct real
estate AUM (4% of abrdn AUMA at 31 December 2023). Of the 74% of direct real
estate AUM considered, 27% has associated Scope 1 and/or Scope 2 carbon
emissions. The remaining in-scope assets with no associated Scope 1 and/or 2
carbon emissions are those that have no landlord energy procurement (i.e. all
energy is procured by the tenant, and therefore all emissions are Scope 3
emissions that fall outside of the scope of the 50% reduction target). While
no Scope 3 emissions are disclosed for the purposes of reporting against the
above target, it should be noted that we collect extensive Scope 3 emissions
data for our real estate investments, which is typically disclosed at the
product-level.
Transition pathways for direct real estate
We continue to implement our decarbonisation framework to support the
decarbonisation of our real estate assets and the delivery of our carbon
targets and financial objectives. This helps us to understand transition
pathways for our assets, and importantly the associated cost.
Public market decarbonisation
(29% AUMA)
WACI: tCO(₂)e/$m Revenue (Scope 1 and 2)
45% reduction
(2023: 41% reduction)
Weighted average carbon intensity (WACI) is our method of tracking public
market decarbonisation, in line with the original recommendations of the TCFD.
In-scope assets include equities, fixed income, and active quantitative
strategies.
Real estate decarbonisation
(4% AUMA)
Carbon intensity: kgCO(₂)e/m(2) (Scope 1 and 2)
34% reduction
(2022: 25% reduction)
Emissions for in-scope direct real estate are divided by floor area and, along
with AUMA, are reported for the 2023 financial year. There is a significant
lag to the collection of data from individual assets, preventing reporting to
31 December 2024.
Active ownership and solutions
Catalysing sustainable change through engagement
Active ownership and ESG considerations are a driver of our investment
process, investment activity, client journey and corporate influence. Through
engagement with the companies in which we invest, and by exercising votes on
behalf of our clients, we seek to improve the financial resilience and
performance of our clients' investments. Where we believe change is needed, we
endeavour to catalyse this through our stewardship capabilities.
Our approach to stewardship
We seek to integrate and appraise environmental, social and governance factors
in our investment process. Our aim is to generate the best long-term outcomes
for our clients, proportionate to the risk preference they have accepted, and
we will actively take steps as stewards and owners to protect and enhance the
value of our clients' assets. We use the UN Global Compact's four areas of
focus in assessing how companies are performing in this area. Specifically, we
expect companies to be able to demonstrate how they manage their exposures
across environmental, labour and employment, human rights and business ethics.
Exercising voting and ownership rights
In 2023, we updated our voting policy to reflect our intention to use
indicators within the Carbon Disclosure Project (CDP) to identify companies
which are not fulfilling their climate commitments. We publicly announced our
focus on voting action at the AGMs of companies which we defined as climate
laggards. We defined a climate laggard to be a company which responded 'No' or
did not respond to the question on board level oversight of climate related
issues in its most recent CDP questionnaire. In 2024, we took voting action at
the AGMs of 15 companies.
For more information on our approach to stewardship and voting with regards to
voting on DEI - please refer to our Sustainability and TCFD report.
Read more in our Sustainability and TCFD report 2024.
Looking forward: Nature and Biodiversity
The risks and opportunities associated with the use of natural capital (the
world's natural resources, which underpin our economy and society) are
becoming increasingly financially material.
The Taskforce for Nature-related Financial Disclosure (TNFD) was established
to develop and deliver a risk management and disclosure framework. We believe
this framework is likely to become the default standard for companies to
promote disclosure of nature-based risks. abrdn is supportive of TNFD and we
will encourage companies to focus on its disclosure and reporting on natural
capital as we believe better disclosure can help support abrdn's analysis of
nature-related financially material risks and opportunities.
Engagement with our top 20 largest financed emitters
In 2022, for our public market investments, we launched a two-year engagement
plan with our top 20 largest financed emitters. This enables meaningful
engagement over time and reflects our objective to work with our investee
companies to support real-world decarbonisation. We have identified
decarbonisation trends in the hardest to abate sectors, such as mining and oil
and gas producers. Through our engagement programme, we have also managed to
identify those companies we believe are likely to be transition leaders. Our
two year engagement plan has now concluded and, in 2025, we will review
progress against our decarbonisation milestones. Should we not see sufficient
progress against these milestones, we may take voting action and/or consider
reducing our financial exposure, if we believe a lack of progress represents a
clear financial risk to our clients.
Responsible business
We work with all our stakeholders to support inclusive growth and a credible
environmental transition. This is our view of responsible business.
Investments
Insurance companies; sovereign wealth funds;
independent wealth managers; individuals;
pension funds; platforms; banks; family offices
interactive investor Our purpose is to enable our Adviser
Individuals clients to be better investors Financial advisers
Section 172 (1) statement
The Board recognises the requirements of reporting against matters set out in
section 172 (1) (a) to (f) of the Companies Act. The illustration on this page
and information on pages 60 to 61 identifies key stakeholders and summarises
actions and engagement activities undertaken during 2024, in support of the
success of the company and for the benefit of members as a whole. Further
information is also provided on pages 92 to 96 of the Corporate governance
statement.
Stakeholder engagement
We strive to engage with our stakeholders to understand their views and take
them into account in our long-term decision-making
Examples of stakeholder engagement during 2024
Clients How do we engage? Related outcomes
- Across our business, we regularly engage with clients via direct meetings, - Launched a new Managed ISA product in ii to encourage low-confidence
perception studies, and attendance at industry conferences. Such engagements investors. See pages 24-29.
help us understand our clients' needs and strategies, including their
sustainability objectives. - Reduced sign-up and transfer-in process lead times; improved call answer
times at Adviser. See pages 30-35.
- Undertook a range of investment performance improvement programmes, which
has supported returns across asset classes. See pages 36-41.
What did we learn?
- Listening to feedback is critical, with indicators, such as consistent
'Excellent' ratings from ii customers on Trustpilot, illustrating this in
practice.
- Across Adviser, we know our clients value service. We measure customer
satisfaction (averaging 91 in 2024) to help us continuously improve the
service we provide.
- Our Investments business has a diverse client base. Independent client
survey feedback highlights strong client service and account management.
Shareholders How do we engage? Related outcomes
- Our Annual General Meeting (AGM) offers shareholders the opportunity to - We aim to provide regular information to shareholders on our trading
interact directly with our Chair and Board. performance. The introduction of quarterly trading updates has supported this
outcome, with the more regular communication viewed as helpful in investor
- In 2024, we began providing the market with quarterly trading updates, feedback.
responding to investor appetite for more frequent communication.
- The business aims to encourage an all-employee share ownership. Learn more
- During 2024, we also carried out a comprehensive programme of one-to-one on page 133.
meetings, conferences and roadshows in the US, as well as the UK, with
domestic and international investors.
What did we learn?
- Feedback on our results announcements and quarterly trading updates allows
us to better understand the views of our shareholders and the market. The
introduction of quarterly trading updates has enabled us to obtain this
information more regularly.
- Feedback from our programme of investor meetings reflects a broad range of
investor interests. Learn more on page 93.
Suppliers How do we engage? Related outcomes
- All suppliers providing services within the scope of our third-party risk - In 2024, we continued to advance our approach to managing sustainability
management framework are engaged through due diligence assessment and ongoing risks presented by suppliers, using established processes to identify and
monitoring. address weaknesses in supplier performance. The information gathered enables
abrdn to continuously improve its approach to supplier sustainability and
- Strategic supplier relationships have dedicated relationship managers to associated outcomes.
support greater oversight and engagement.
- ESG topics are included within our oversight reviews.
What did we learn?
- Through due diligence and ongoing monitoring, we are able to assess
suppliers against our third party expectations, as outlined in our Global
Third-Party Code of Conduct.
- Many of our suppliers align with our expectations and, in many cases,
demonstrate an established understanding of sustainability risks. However,
where suppliers do not align, we aim to establish stronger controls to support
them and monitor their performance.
Regulators How do we engage? Related outcomes
- abrdn retains membership of various industry groups and forums, which - In 2024, we engaged with our regulator on implementation of fund labelling
supports the development of a collective sector view. as part of the Sustainability Disclosure Requirements.
- We proactively respond to government, parliament and regulatory - We published extensive consumer research highlighting the need for action
consultations and inquiries relevant to our businesses and stakeholders. to improve financial literacy among UK adults.
What did we learn?
- We are supportive of greater interoperability in global sustainability
disclosure standards.
- We are also strong believers in client-first outcomes and support the
implementation of requirements such as Consumer Duty.
Stakeholder engagement
Examples of stakeholder engagement during 2024 continued
Communities How do we engage? Related outcomes
- We conduct research and publish insights relating to topics such as - £2.2m contributed to charitable causes in 2024 (2023: £2.1m).
financial inclusion, savings and retirement, and the low carbon transition.
- 3,301 hours spent volunteering by colleagues during 2024 (2023: 3,248).
- The abrdn Charitable Foundation directs our community impact strategy,
with a focus on tomorrow's generation. - We have committed to multi-year partnerships with MyBnk and WorkingRite,
which are delivering financial education and employability programmes designed
- Our colleagues volunteer and fundraise for a variety of charitable causes. to address systemic barriers and to support financial inclusion for young
We provide three paid volunteering days to abrdn colleagues to enable this. people.
What did we learn?
- Insights, such as our 'Savings Ladder' research suggest that 23 million
people in the UK have poor financial literacy and that those with good
financial literacy are more likely to have a pension.
- Our colleagues have primarily chosen to volunteer for social welfare
charities, supporting those in need or facing hardship, or environmental
charities.
Colleagues How do we engage? Related outcomes
- Our annual colleague engagement survey (page 52). - In clarifying our ambition and re-setting our networks, colleagues
recognised a refreshed ambition and focus. 81% feel included by the people
- Pulse surveys throughout the year, checking in with colleagues. they work with.
- Reinvigorated regular townhalls and informal coffee sessions to provide - Refined approach to stating our desired culture and measuring our progress
candid Q&A opportunities with our ELT. towards that, through our new Culture Dashboard.
- Our new colleague council brought together all aspects of colleague voice, - Introduction of our new Career Framework, supporting colleagues' personal
including representation from each colleague network, region and area of the development, connecting back to highlight learning and development
business. opportunities.
What did we learn?
- Engagement is steadily improving, with notable positive shifts in pride
and advocacy.
- Focused leadership engagement activity, and visible, approachable,
leadership style have driven increased scores in motivation and confidence.
- Colleagues' scores show strength in client focus, interesting work, and
strong collaborative team relationships.
- Our Board Employee Engagement programme includes a number of opportunities
throughout the year for employees to engage with our designated NED for
employee engagement.
Inside abrdn's Board Employee Engagement: a year in review
By Hannah Grove, Designated non-executive Director for Board Employee
Engagement (BEE)
2024: a year of engagement
The following are some example activities from the BEE programme in 2024:
- 14 discussion sessions were held with groups across various
levels, businesses and geographies, including the Future Leaders cohort,
female talent groups, the newly formed Colleague Council and colleagues in
America, Europe, Asia and the UK.
- Six 'Meet the NEDs' sessions took place including events with
colleagues in London, Edinburgh and Philadelphia, as well as a specific
session held by our subsidiary Adviser board directors for Adviser colleagues
in Edinburgh.
- Six Employee Network engagements, including a roundtable
discussion with our US network chairs in Philadelphia.
More detail in relation to the programme can be found on page 93.
Looking ahead to 2025
We will stay close to colleagues and maintain high board visibility,
continuing to leverage the BEE programme to support progress and improve
engagement, which will ultimately deliver better performance.
Feedback from colleagues
"These are excellent sessions - insightful, candid and with a group of Non
Execs who are, without exception, very approachable."
"These are just brilliantly relaxed and engaged sessions. There's honest
sharing and supportive conversation and I'm always grateful for the
opportunity to meet the NEDs in person. I strongly recommend any other team
member take advantage of these sessions at the next occasion."
Non-financial disclosure
Non-financial and sustainability information statement
Statement of the extent of consistency with FCA UKLR 6.6.6(8)R for TCFD
disclosure
The disclosure in this report, with additional information in our
Sustainability and TCFD report, is designed to be consistent with the 11
recommendations of the TCFD framework, except for disclosure of certain Scope
3 emissions categories, including complete disclosure of financed emissions.
Limitations and exclusions
Data availability and maturity remains a challenge and has bearing on the
completeness of the information we can report. While our disclosure remains
consistent with prior periods, we acknowledge that our reporting may evolve in
future periods. Our view is that sufficient climate-related data is available
to better enable our investment processes and to manage our objectives as a
responsible business. This also allows us to track our progress against
targets, outlined on pages 56 and 57. Full details of our limitations and
exclusions relating to operational emissions disclosures is summarised within
our Sustainability Reporting criteria in the Other Information of this
document (page 302).
Summary of non-financial disclosure
The information on this page and page 63 summarises where we have made
required disclosures under the Companies Act 414CA and 414CB in this report in
addition to the information required under the FCA UKLR 6.6.6(8)R. Additional
information is also provided in our standalone Sustainability and TCFD report,
and other disclosure documents, which we believe adds value for our
stakeholders and reflects common market practice.
Recommended TCFD-aligned disclosure Page(s)
Governance Describe the Board's oversight of climate- related risks and opportunities. 44
Describe management's role in assessing and managing climate-related risks and 44
opportunities
Strategy Describe the climate-related risks and opportunities the organisation has 53-54
identified over the short, medium, and long-term
Describe the impact of climate-related risks and opportunities on the 53-54,
organisation's businesses, strategy, and financial planning.
55
Describe the resilience of the organisation's strategy, taking into 55
consideration different climate related scenarios, including a 2°C or lower
scenario.
Risk management Describe the organisation's processes for identifying and assessing 53
climate-related risks
Describe the organisation's process for managing climate-related risks 53-54
Describe how processes for identifying, assessing, and managing 53
climate-related risks are integrated into the organisation's overall risk
management
Metrics and targets Disclose the metrics used by the organisation to assess climate-related risks 56-57
and opportunities in line with its strategy and risk management process.
Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) 56-57
emissions, and the related risks
Describe the targets used by the organisation to manage climate-related risks 56-57
and opportunities and performance against targets
Climate and environment
Our focus Our continued focus is on managing our climate-related risks and
opportunities, which is presently the most significant environmental matter
for our business.
Our sustainability strategy, discussed by the Board in H2 2024, includes a
focus on environmental transition, as we look to now place strategic emphasis
on matters beyond climate, both as investors and in our business.
Policies and Operational environment policy
due diligence Listed company voting principles
Sustainability and TCFD report
Policy Climate targets applicable to our operations and investments
outcomes Active engagement approaches and climate tools to support our investment
processes
Related Disclosure on page 54
risks
Risk Sustainability professionals and governance structure
management Tools in place to support climate-related risk management
Non-financial Greenhouse Gas emissions metrics
KPIs Climate-related voting and engagement
Non-financial information
Non-financial and sustainability information statement
Employees Social matters Human rights Anti-corruption and anti-bribery
Our focus Our objective is to build a business that attracts brilliant talent; and where Our sustainability strategy, reviewed by the Board in H2 2024, includes a Our approach to human rights is to work across our operations, investments, Our business is conducted fairly, honestly, and with integrity. We do not take
all our people can thrive; where they belong, and can learn, develop and do focus on inclusive growth. This is a strategic objective as we look to enable and supply chain to support safe and secure work, and mitigate related risks. part in acts of corruption, or pay or receive bribes, whether directly or
their best work. financial inclusion and education via our products and services, external This is a focus for our active engagement approach, and we increasingly indirectly. We have clear expectations outlined in our global code of conduct,
partnerships, and industry campaign initiatives. provide transparency on our supply chain activities. and policies and procedures embedded across abrdn.
Policies and due diligence Global diversity, Equity and Inclusion policy Client and customer policy Global code of conduct Anti-Financial Crime policy
Global code of conduct Charitable giving strategy Third-party code of conduct Anti-Bribery and Anti-Corruption standards
Modern slavery statement Global code of conduct
Privacy and data protection
Human rights statement
Policy outcomes Annual colleague engagement survey Industry campaigns on financial education Human rights and labour are focus areas for active ownership Applicable controls embedded within operating procedures
Inclusive recruitment and development programmes Charitable partnerships with MyBnk, and WorkingRite Increased transparency on our supply chain
Launch of our colleague council
Related risks Noted amongst principal risks and uncertainties Lack of financial inclusion for our key stakeholders Unsafe and insecure work in our value chain Noted amongst principal risks and uncertainties
Lack of data protection and security
Risks to vulnerable customers
Risk management Listening to and responding to colleague feedback Inclusive growth is a strategic sustainability focus area Investment tools and processes Required training for all colleagues
Developing our career proposition Supplier risk assessments Controls to prevent and detect instances of bribery and corruption
Strategic focus on talent and culture Data protection procedures
Non-financial KPIs Employee engagement score Client and customer satisfaction Third-party risk assessments Completion rates of staff training
Diversity, equity, and inclusion targets Impact reporting from charity partnerships Data incidents and breachers Gifts and entertainment incidents and breachers
Related voting engagement activities
Reference Pages 49-52 Pages 45-48 Page 60 Page 83
Our key performance indicators
Adjusted net operating revenue(1) KPI APM
£1,321m
This measure is a component of adjusted operating profit and includes revenue
we generate from asset management charges, platform charges and other
transactional/advice charges and treasury income.
Adjusted diluted earnings per share KPI APM
15.0p
This measure shows on a per share basis our profitability and capital
efficiency, calculated using adjusted profit after tax.
Adjusted capital generation KPI APM
£307m
This measure aims to show how adjusted profit contributes to regulatory
capital.
Full year dividend per share KPI
14.6p
The total annual dividend (interim and final) is an important part of the
returns that we deliver to shareholders and is assessed each year in line with
our stated policy to hold at 14.6p until it is covered at least 1.5 times by
adjusted capital generation.
Adjusted operating profit KPI APM
£255m
Adjusted operating profit is our key alternative performance measure and is
how our results are measured and reported internally.
IFRS profit/(loss) before tax KPI APM
£251m
IFRS profit/loss before tax is the measure of profitability set out in our
financial statements. As well as adjusted profit, it includes adjusting items
such as restructuring expenses and profit on disposal of subsidiaries.
Net capital generation KPI APM
£238m
This measure shows Adjusted capital generation less Restructuring and
corporate transaction expenses (net of tax).
APM Alternative performance measures
We assess our performance using a variety of performance measures including
APMs such as adjusted operating profit, adjusted profit before tax, adjusted
capital generation and net capital generation.
APMs should be read together with the Group's IFRS financial statements.
Further details of all our APMs are included in Supplementary information.
1. The measure of segmental revenue has been renamed from net operating revenue
to adjusted net operating revenue. See Note 3(c) for a reconciliation of these
revenue measures.
Investment performance(1) KPI
(Percentage of AUM performing over three years)
60%
This measures our performance in generating investment return against
benchmark/target. Calculations for investment performance are made gross of
fees except where the stated comparator is net of fees.
Employee engagement survey KPI
57%
This measure is important in gauging the engagement and motivation of our
people in their roles. It also enables our managers at all levels to take
local action in response to what their teams are telling them.
Other indicators
AUMA
£511.4bn
Net flows - Total
£(1.1)bn
IFRS diluted earnings per share
13.0p
Gross inflows
£78.3bn
Net flows
(excluding liquidity, and LBG tranche withdrawals in 2022)
£(6.1)bn
1. The scope of the investment performance calculation has been
extended to cover all funds that aim to track or outperform a benchmark, with
certain assets excluded where this measure of performance is not appropriate
or expected. 2022 and 2023 comparative have been restated.
Transforming our business to deliver sustainable profitable growth
Ian Jenkins
Interim Chief Financial Officer
"2024 was a year of significant progress, underpinned by consistent delivery
and execution. I am pleased by the success of the first year of our cost
transformation programme and the benefits this is already delivering. Looking
ahead, I am confident we can build on this progress and complete the
transformation plans we have in place, in turn helping us to unlock the
significant potential in the Group. Supported by our strong balance sheet and
diversified three-business model, we have strong foundations for sustainable
and profitable growth."
>£100m
Annualised cost savings delivered
£255m
Adjusted operating profit
£251m
IFRS profit before tax
£238m
Net capital generation
£1,465m
Common Equity Tier 1
Overview
We have delivered an increase in adjusted operating profit, both at Group
level and across all three of our Wealth & Investments businesses.
Notably, this included our Investments business, despite the geopolitical and
structural challenges which impacted the sector as a whole, and disposals
which impacted both our Investments business and ii.
During the year, we also made significant progress in improving our efficiency
which remains a priority for the Group. The associated savings achieved in the
year, coupled with the clear strengths of our diversified business model, have
enabled us to deliver improved financial performance.
At the start of 2024, we announced our transformation programme with the
target of achieving at least £150m of annualised cost savings by the end of
2025. I am pleased to reaffirm my confidence in this target, and to highlight
some of the key benefits delivered by the programme during 2024.
With improved financial discipline now embedded in each of the businesses, we
are seeing benefits across the Group.
The programme has delivered £106m of annualised savings in 2024, with £70m
reflected in our financial performance for the year.
This exceeded our initial expectations and has driven a 7% reduction in our
adjusted operating expenses to £1,066m (2023: £1,149m).
Our transformation is not only about removing cost, but also about
strategically investing in technology, processes and our people. Amongst other
improvements, we have rationalised our fund range for our clients focusing on
fewer, scalable products and removing small and unprofitable funds.
The clear progress we have made in transforming our cost base, particularly in
Investments, has created a leaner, more efficient business with a clear path
to profitable growth.
Our balance sheet remains strong. This has been crucial in enabling us to fund
our transformation programme and invest in the business while continuing to
support our dividend. Throughout 2024, we have continued to simplify our
business, including through disposals which generated gains on sale of £100m.
These included the sale of our Virgin Money joint venture and our
European-headquartered Private Equity business in April, threesixty in July
and the partial sale of Focus Business Solutions in December.
In summary, I am confident that the actions we have taken in 2024 are creating
stronger foundations to deliver better outcomes for our clients, colleagues
and shareholders.
Profit
Adjusted operating profit was up 2% to £255m (2023: £249m). This included a
2% increase in ii to £116m (2023: £114m), a 7% increase in Adviser to £126m
(2023: £118m) and a 22% increase in Investments to £61m (2023: £50m).
IFRS profit before tax was £251m, a significant improvement (2023: loss
£6m). This comprised adjusted operating profit of £255m, adjusted net
financing costs and investment return of £99m (2023: £81m), and an overall
loss from adjusting items of £103m (2023: loss of £336m).
Adjusting items in 2024 included restructuring and corporate transaction
expenses of £100m (2023: £152m), primarily relating to our transformation
programme. Adjusting items benefited from a £100m profit on disposal of
subsidiaries and interests in joint ventures (2023: £79m), principally
relating to the sale of our European-headquartered Private Equity business in
April 2024. Adjusting items also included a loss of £27m on the fair value of
significant listed investments (2023: loss of £178m), reflecting the 5%
reduction in the Phoenix share price in 2024. Our share of profit in the HASL
joint venture increased to £26m (2023: £3m) including investment-related
gains due to favourable investment market conditions.
Adjusted net operating revenue
Adjusted net operating revenue was 6% lower at £1,321m (2023: £1,398m). This
included the impact of net outflows and changes to asset mix in Investments,
and a net reduction from corporate actions in Investments and ii.
At ii, adjusted net operating revenue was 3% lower at £278m (2023: £287m),
or 7% (£19m) higher adjusting for the sale of abrdn Capital, which included
the MPS business that transferred to Adviser in May 2023.
The improvement in underlying revenue in ii was driven by strong organic
customer growth, increased trading activity, and stronger treasury income.
Trading revenue increased 46% to £70m (2023: £48m) reflecting higher trading
and FX activity. Subscription revenue, gross of marketing incentives, of £60m
(2023: £58m) reflected continued strong organic customer growth. Treasury
income increased 3% to £138m, reflecting continued growth in average cash
balances as well as the continued high interest rate environment. Fee income
reduced to £25m (2023: £57m) primarily as a result of the sale of abrdn
Capital and the associated transfer of MPS to Adviser.
In our Adviser business, adjusted net operating revenue was up 6% to £237m
(2023: £224m). This was primarily due to the full 12-month benefit from the
revised Wrap SIPP distribution agreement as well as higher treasury income.
Total Adviser revenue in 2024 comprised £169m of platform charges (2023:
£169m), £33m of treasury income (2023: £31m) and £37m of other income
(2023: £26m).
In Investments, adjusted net operating revenue was 9% lower at £797m (2023:
£878m), driven by a continuation of trends seen in recent years. These
included changes to asset mix, with net outflows from higher margin asset
classes, mainly equities, partially offset by strong inflows into lower margin
asset classes such as quantitative strategies and liquidity. Across our
Institutional & Retail Wealth business AUM amounted to £210.5bn at 31
December 2024 (2023: £211.2bn) with the small reduction driven by the sale of
our European-headquartered Private Equity business. Excluding this sale and
other corporate actions, AUM increased by 3% in the year, driven by positive
market movements and net inflows. Total net flows across our I&RW business
improved by over £18bn, with a small net inflow of £0.3bn in 2024 compared
to an outflow of £17.9bn in 2023.
Our relationship with Phoenix is significant to our Investments business, with
Insurance Partners AUM up 2% to £159.2bn. Underlying this trend, positive
market movements more than offset net outflows of £4.3bn principally relating
to run-off in the heritage business.
Adjusted operating expenses
Adjusted operating expenses decreased by 7% to £1,066m (2023: £1,149m).
This principally reflected transformation savings of £70m, which exceeded the
original £60m cost reduction target for 2024 given at the time the
transformation programme was announced.
The impact of the transformation programme is most evident in our Investments
business with adjusted operating expenses reducing by 11% to £736m (2023:
£828m). These cost savings were driven by lower staff costs, including the
net benefit from corporate transactions, lower outsourcing and professional
fees, project and change spend and property costs. These reductions were
partially offset by the impact of staff cost inflation.
At ii, operating expenses reduced 6% to £162m (2023: £173m), primarily
reflecting the sale of abrdn Capital. Excluding the impact of this sale,
expenses increased by £14m or 9%. This was driven by increased investment in
the ii brand, marketing, product development and our people to support
continued organic growth.
In Adviser, adjusted operating expenses increased 5% to £111m (2023: £106m)
reflecting continued investment in our proposition. Expenses in 2024 benefited
from a temporary third-party outsourcing discount of £17m.
The 2024 in-year savings result in annualised run-rate savings from our
transformation programme of over £100m. This gives us confidence in achieving
the programme's overall target of delivering total annualised run rate savings
of at least £150m by the end of 2025. However, the programme we have put in
place is cost-led rather than cost-only, and we will continue to strategically
invest in the business to deliver sustainable and profitable growth, as well
as better outcomes for our clients and colleagues.
Capital
We maintain a strong capital position. This provides us with resilience during
periods of economic uncertainty and volatility, such as those seen in the last
few years of heightened geopolitical risk and elevated inflation.
In 2024, we remained disciplined in our capital allocation, delivering
continued returns to our shareholders via dividends while strategically
investing in our businesses to support sustainable profitable growth.
We have continued to simplify our business through the sale of non-core
businesses, with disposals generating a total of £74m of capital in 2024. In
April, we completed the sale of our European-headquartered Private Equity
business for £92m and, in December completed the sale of 80% of Focus
Business Solutions via a management buyout. This follows significant
simplification in 2023, which included the further disposals of our listed
Indian stakes, and our US Private Equity and Venture Capital business. In
September 2024, we also completed the acquisition of closed-end funds from
First Trust Advisors to build further on our capabilities in the CEF market
where we have significant scale.
We intend to maintain our disciplined approach to capital:
- We are committed to delivering on the actions outlined in our
transformation programme including at least £150m of Group annualised cost
savings by the end of 2025. Associated implementation costs in 2024 were £73m
with total implementation costs expected to be around £150m by the time the
programme concludes. As in 2024, CET1 surplus capital will be deployed to fund
the restructuring in 2025.
- We will continue to invest in our business in a disciplined way,
with a high bar used to assess organic growth investments and a highly
selective approach to inorganic opportunities.
- It remains the Board's intention to pay a total annual dividend of
14.6p (with interim and final dividends of 7.3p per share), until it is
covered at least 1.5 times by adjusted capital generation (currently covered
1.18 times).
- Over the short term, the dividend will largely be supported by
adjusted capital generation and our surplus capital.
Outlook
As reflected in our 2024 results, we have improved the efficiency of the
Group, making significant advances toward right-sizing our cost base,
particularly in the Investments business. Each of our businesses are at
different stages of their development and none has yet achieved its full
potential. However, we are pleased with the progress we have made.
Profitability has increased in all of our core businesses, and we are
confident in our growth plans for each.
Looking forward, we expect interest rates to reduce in 2025. While the pace of
that reduction remains uncertain, falling rates in the UK are expected to lead
to a gradual reduction of the cash margins earned in ii and Adviser.
Nevertheless, we expect growth in treasury income in ii helped by continued
growth in cash balances. Revenue in ii is also expected to benefit from
increased customer activity including further use of the platform's global
trading and FX capabilities.
Other factors expected to impact revenue in 2025 include the previously
announced Adviser platform repricing to improve its competitive positioning.
We also expect the impact of changes in asset mix in 2024 and ongoing market
dynamics to result in a slight reduction in revenue margins in Investments in
2025.
Against this backdrop, we expect to make further progress in driving
efficiency improvements and right-sizing our cost base, principally through
our transformation programme.
Our balance sheet and capital generation benefit from our stake in Phoenix and
the surplus in our defined benefit staff pension plan.
We have reached agreement with the trustee of the defined benefit pension plan
to utilise part of the existing surplus to fund the cost of providing defined
contribution benefits to current employees. This is expected to result in an
annual benefit of c.£35m to net capital generation from July 2025 with an
annual review of other options including an insurance buyout. This agreement
enables the Group to unlock value from the plan, while largely maintaining the
surplus and retaining optionality. See Note 31 for further details.
Looking beyond 2025, we continue to see long-term structural growth in the UK
savings and wealth industry, which we are well-positioned to capture. In
addition, while market conditions are expected to remain challenging for
active asset managers generally, we see a number of areas of attractive
opportunities that our Investments business is well-placed to serve.
New targets
We are announcing a number of FY 2026 targets, which reflect the increasing
momentum in the Group. This includes ambitious targets for adjusted operating
profit of at least £300m and net capital generation of c.£300m, reflecting
our confidence in the Group's potential for profit growth and sustainability
of the dividend. The Group targets are underpinned by ambitions for each of
our three Wealth & Investments businesses:
- At interactive investor, we will focus on sustaining organic
growth, with customer numbers continuing to increase by 8% per year, in line
with this year's impressive rate. As this growth is delivered, we expect key
measures of efficiency to improve, reflecting the scalability of the business.
We are therefore targeting a cost/AUMA ratio of less than 20bps in FY 2026.
- We aim to deliver over £1bn of net inflows at Adviser in FY 2026
while maintaining a Net Promoter Score of over +40, reflecting our focus on
delivering leading client service.
- Finally, we are targeting a step change in profitability in
Investments, aiming for adjusted operating profit of over £100m for FY 2026,
supported by investment performance of over 70% on a 3-year basis.
We believe none of our businesses is yet operating at its full potential,
despite 2024 having been a year of progress and positive realignment.
By continuing this momentum through 2025 and delivering on our 2026 targets, I
am confident we can deliver improved outcomes for our clients, colleagues and
shareholders.
Results summary
2024 2023
Analysis of profit £m £m
Adjusted net operating revenue(1) 1,321 1,398
Adjusted operating expenses (1,066) (1,149)
Adjusted operating profit 255 249
Adjusted net financing costs and investment return 99 81
Adjusted profit before tax 354 330
Adjusting items including results of associates and joint ventures (103) (336)
IFRS profit/(loss) before tax 251 (6)
Tax (expense)/credit (3) 18
IFRS profit for the year 248 12
The IFRS profit before tax was £251m (2023: loss £6m) including adjusted
operating profit of £255m (2023: £249m) and Adjusted net financing costs and
investment return of £99m (2023: £81m). Adjusting items were £(103)m
(2023: £(336)m) including:
- Restructuring and corporate transaction expenses of £100m (2023:
£152m), including costs relating to our transformation programme.
- Losses of £27m (2023: losses of £178m) from the change in fair
value of significant listed investments as a result of the decrease in the
share price of Phoenix in 2024. 2023 included losses resulting from the
reductions in the share prices of HDFC Asset Management, HDFC Life and
Phoenix.
- Profit on disposal of subsidiaries and interests in joint ventures
of £100m (2023: £79m).
Adjusted operating profit was £6m higher than 2023. Lower revenue in
Investments was partly offset by growth in revenue in both ii (excluding the
impact of the sale of abrdn Capital) and Adviser. Lower expenses were
primarily due to the benefit of significant cost reduction activity in
Investments. Our cost transformation programme has delivered a £70m benefit
of lower adjusted operating expenses in 2024, with an annualised benefit of
over £100m. We remain on track to deliver annualised cost savings of at least
£150m by the end of 2025. The implementation costs were £73m in 2024, £61m
included in restructuring expenses and a £12m loss on disposal of
subsidiaries.
Adjusted net operating revenue
Adjusted net operating revenue decreased by 6% reflecting:
- Impact of net outflows and changes to asset mix resulting in lower
Investments margin.
- Other margin changes including the benefit in Adviser from the
revised distribution arrangement with Phoenix, higher trading and FX activity
in ii, and higher total treasury income of £171m (2023: £165m).
- £31m benefit of favourable market movements.
- £(41)m net impact from corporate actions mainly reflecting the
sales of the US and European-headquartered Private Equity businesses and the
discretionary fund management business, partly offset by the acquisition of
the healthcare fund management capabilities of Tekla.
Adjusted operating expenses
2024 2023
£m £m
Staff costs excluding variable compensation 460 511
Variable compensation 88 75
Staff and other related costs(2) 548 586
Non-staff costs 518 563
Adjusted operating expenses 1,066 1,149
Adjusted operating expenses reduced by 7% reflecting:
- 10% reduction in staff costs (excluding variable compensation),
with the benefit of fewer FTEs (8%) reflecting our cost transformation
programme and net result of corporate transactions, partly offset by salary
increases and increased investment, especially in ii, to drive growth.
- Higher variable compensation reflecting business performance.
- 8% reduction in non-staff costs, with cost savings partly offset
by the impact of inflation.
1. The measure of segmental revenue has been renamed from net
operating revenue to adjusted net operating revenue. See Note 3(c) for a
reconciliation of these revenue measures.
2. See Supplementary information for a reconciliation to IFRS
staff and other employee related costs.
interactive investor(1)
Adjusted operating profit Adjusted net operating revenue Cost/income ratio Net flows
£116m £278m 58% £5.7bn
2024 2023
Adjusted net operating revenue £278m £287m
Adjusted operating expenses £(162)m £(173)m
Adjusted operating profit £116m £114m
Cost/income ratio 58% 60%
AUMA(2) £77.5bn £66.0bn
Gross inflows £13.7bn £10.2bn
Redemptions £(8.0)bn £(7.3)bn
Net flows £5.7bn £2.9bn
Adjusted operating profit
- Profit increased by £2m to £116m, including the benefit of lower
losses in the financial planning business and higher trading income. This was
partly offset by investment to drive organic growth, and the impact of the
sale of abrdn Capital in 2023.
Adjusted net operating revenue
- Revenue of £278m, was £9m lower than in 2023, reflecting the
sale of abrdn Capital which (including MPS revenue which transferred to
Adviser) contributed £28m to revenue in 2023.
- Excluding abrdn Capital, revenue increased by £19m or 7% and
continued to benefit from diversified revenue streams.
- Subscription revenue, gross of marketing incentives, of £60m
(2023: £58m) reflected continued strong organic customer growth.
- Trading revenues of £70m reflected higher trading and FX
activity, driven by increased volatility and higher non-UK equity trading.
- Revenue of £278m, was £9m lower than in 2023, reflecting the
sale of abrdn Capital which (including MPS revenue which transferred to
Adviser) contributed £28m to revenue in 2023.
- Treasury income increased to £138m, benefiting from sustained
high interest rates since 2023 and the growth in cash balances.
- The average cash margin in 2024 was 229bps
- (2023: 236bps) and is expected to be in the region of 200-220bps
in 2025.
- Fee income reduced to £25m primarily reflecting the sale of abrdn
Capital and transfer of MPS in 2023.
2024 2023
Adjusted net operating revenue £m £m
Subscription/account fees(3) 52 54
Trading transactions 70 48
Treasury income 138 134
Fee income 25 57
Less: Cost of sales (7) (6)
Adjusted net operating revenue 278 287
Adjusted net operating revenue 278 259
(excluding abrdn Capital)
Adjusted operating expenses
- Lower adjusted operating expenses of £162m mainly reflect the
sale of abrdn Capital.
- Excluding abrdn Capital, expenses increased by £14m or 9%,
reflecting higher advertising as we increase awareness of the ii brand and
product/proposition development to support ii's organic growth. In addition,
record high SIPP transfer-in volumes were supported by an uplift in
operational resource which also provides future capacity.
AUMA
- AUMA increased to £77.5bn (2023: £66.0bn) benefiting from
stronger markets and growth in net flows.
- Average customer cash balances as a percentage of average AUA were
8.7%(4) (2023: 9.8%(4)).
- Total customers increased by 8% to 439k(4)
- (2023: 407k(4)) due to organic growth. Our strategy to increase
SIPP market penetration continues, with the number of customers holding a SIPP
account up by 29% to 80.6k(4) (2023: 62.4k(4)).
Gross and net flows
- Net inflows remained strongly positive, increasing to £5.7bn
(2023: £2.9bn) due to growth from new customers and existing customers
choosing more of our products, including our SIPP.
- Within this, the ii direct platform generated net inflows of
£6.1bn offset by £0.4bn net outflows in the financial planning business.
1. See Supplementary information for additional operational
metrics.
2. Includes financial planning business AUA of £3.7bn (2023:
£4.3bn).
3. Net of £(8)m (2023: £(4)m) of marketing incentives.
4. Excludes our financial planning business.
Adviser
Adjusted operating profit Adjusted net operating revenue Adjusted net operating revenue yield Net flows
£126m £237m 31.2bps £(3.9)bn
2024 2023
Adjusted net operating revenue £237m £224m
Adjusted operating expenses £(111)m £(106)m
Adjusted operating profit £126m £118m
Cost/income ratio 47% 47%
Adjusted net operating revenue yield(1) 31.2bps 30.6bps
AUMA(2) £75.2bn £73.5bn
Gross inflows £6.5bn £5.8bn
Redemptions £(10.4)bn £(7.9)bn
Net flows £(3.9)bn £(2.1)bn
Adjusted operating profit
- Profit growth of 7% to £126m (2023: £118m).
- Cost/income ratio remained stable at 47%, benefiting from higher
revenue, which was partly offset by higher expenses driven by investment in
our proposition.
- Expenses continued to benefit from a temporary third-party
outsourcing discount of £17m (2023: £16m).
Adjusted net operating revenue
- Revenue increased by 6% to £237m mainly reflecting the full 12
month benefit of a revised distribution arrangement, agreed in H2 2023, for
services provided to Phoenix in respect of the Wrap SIPP.
- Platform charges remained stable at £169m.
- Treasury income on client balances increased to £33m, benefiting
from higher interest rates offset by an increase in cash interest paid to
clients.
- The average margin earned on client cash balances during 2024 was
263bps (2023: c228bps). The indicative Adviser average cash margin for FY 2025
is expected to be lower reflecting the impact of expected Bank of England rate
cuts.
- Other revenue increased by £11m mainly reflecting the 12 month
benefit of the revised distribution arrangement with Phoenix of £12m (2024:
£27m, 2023: £15m).
2024 2023
Adjusted net operating revenue
£m £m
Platform charges 169 169
Treasury income 33 31
Other revenue 37 26
Less: Cost of sales (2) (2)
Adjusted net operating revenue 237 224
1. Adjusted net operating revenue yield excludes revenue of £4m
(2023: £7m) for which there are no attributable assets.
2. Includes Platform AUA of £72.4bn (2023: £70.9bn) and MPS
AUMA of £2.8bn (2023: £2.6bn).
Adjusted net operating revenue yield
- Increased to 31.2bps due to the higher revenue as outlined under
adjusted net operating revenue.
- We expect to see a reduction in revenue yield of 2-3bps in 2025
reflecting the previously announced repricing which will be applied to
existing back book before the end of Q1 2025.
AUMA
- AUMA increased slightly to £75.2bn driven by positive market
movements offset by net outflows.
- Average AUMA of £74.7bn was 6% higher than 2023.
- Average customer cash balances as a percentage of average AUMA
(excluding bonds and Wrap SIPP) were 2.4% (2023: 2.5%).
Gross and net flows
- AUMA increased slightly to £75.2bn driven by positive market
movements offset by net outflows.
- Average AUMA of £74.7bn was 6% higher than 2023.
- Average customer cash balances as a percentage of average AUMA
(excluding bonds and Wrap SIPP) were 2.4% (2023: 2.5%).
- Net outflows of £3.9bn (2023: £2.1bn) reflected higher
redemptions in 2024.
- Higher gross inflows included the full 12 months benefit of the
MPS business.
- Elevated outflows are driven by higher customer actions such as
transfers out, drawdown of tax free cash and continued IFA consolidation in
the market.
- We have taken actions to address these challenges in 2024
including improvements to our service proposition, delivery of a strategic
reprice for new clients which will be extended to the back book in Q1 2025,
improving our competitive position in the market and investing in our senior
leadership team and distribution capabilities.
Investments
Adjusted operating profit Adjusted net operating revenue Adjusted net operating revenue yield Net flows
£61m £797m 21.3bps £(4.0)bn
Total Institutional & Retail Wealth Insurance Partners
2024 2023 2024 2023 2024 2023
Adjusted net operating revenue(1) £797m £878m
Adjusted operating expenses £(736)m £(828)m
Adjusted operating profit £61m £50m
Cost/income ratio 92% 94%
Adjusted net operating revenue yield 21.3bps 23.5bps 30.8bps 32.6bps 8.7bps 10.0bps
AUM £369.7bn £366.7bn £210.5bn £211.2bn £159.2bn £155.5bn
Gross inflows £60.5bn £50.3bn £36.7bn £28.1bn £23.8bn £22.2bn
Redemptions £(64.5)bn £(69.3)bn £(36.4)bn £(46.0)bn £(28.1)bn £(23.3)bn
Net flows £(4.0)bn £(19.0)bn £0.3bn £(17.9)bn £(4.3)bn £(1.1)bn
Net flows excluding liquidity(2) £(9.0)bn £(15.3)bn £(4.7)bn £(14.2)bn £(4.3)bn £(1.1)bn
Adjusted operating profit
- Profit increased by 22% or £11m to £61m reflecting the benefit
of operational leverage, with lower revenue more than offset by lower
expenses.
Adjusted net operating revenue
- 9% lower than 2023 largely due to net outflows, particularly in
equities and changes to the asset mix.
- £(11)m net impact of corporate actions.
- Performance fees of £12m (2023: £14m) were earned mainly from
fixed income, alternatives, active equities and real assets.
Adjusted operating expenses
- Adjusted operating expenses reduced by £92m (11%) to £736m
(2023: £828m) including £13m benefit resulting from the disposal of our US
Private Equity Venture Capital business in H2 2023 and our
European-headquartered Private Equity business in April 2024.
- Adjusted operating expenses also benefited from lower staff costs,
outsourcing and professional fees, project and change spend and property
costs, as well as a reduced allocation of central Group costs.
Institutional & Retail Wealth
Adjusted net operating revenue
- 10% lower at £654m (2023: £724m) primarily due to net outflows
particularly from higher margin asset classes, consistent with the risk-off
environment seen across the market and the net impact of corporate actions.
- 4% reduction in average AUM to £210.5bn (2023: £220.0bn).
Equities and multi-asset average AUM down 7% and 6% respectively.
Adjusted net operating revenue yield
- 1.8bps lower at 30.8bps largely due to changes in asset mix
including the decrease in private equity average AUM resulting from the
disposal of our US Private Equity Venture Capital business in H2 2023 and our
European-headquartered Private Equity business in April 2024 offset in part by
the benefit arising from the acquisition of the fund management capabilities
of Tekla Capital Management in H2 2023 and the acquisition of First Trust
closed end funds in H2 2024.
Gross inflows
- Excluding liquidity, £6.0bn (31%) higher at £25.5bn (2023:
£19.5bn) driven by improvement across most asset classes including
quantitatives and real assets. This reflects continued demand for these asset
classes and the strength of our offering.
Net flows
1. Net inflows of £0.3bn (2023: outflows £17.9bn) included the
benefit of liquidity inflows in the period. Excluding liquidity, net outflows
were £9.5bn lower than 2023 at £4.7bn benefiting from both higher gross
inflows and lower redemptions.
2. Excluding liquidity, net outflows improved to (2)% of opening
AUM compared with (7)% in 2023.
3. Redemptions (excluding liquidity) were £3.5bn lower than
2023 at £30.2bn (2023: £33.7bn) due to lower fixed income and multi-asset
redemptions.
1. Includes performance fees of £12m (2023: £14m).
2. Institutional & Retail Wealth liquidity net flows excluded.
Insurance Partners
Adjusted net operating revenue
- 7% lower in 2024 at £143m (2023: £154m), reflecting the impact
of asset mix and lower pricing offset by a 7% increase in average AUM to
£158.0bn.
Adjusted net operating revenue yield
- Adjusted net operating revenue yield decreased to 8.7bps (2023:
10.0bps) due to a shift in asset mix from active to passive strategies. This,
together with related pricing changes, is expected to result in a further
reduction in revenue yields.
Gross inflows
- £1.6bn higher than 2023 at £23.8bn (2023: £22.2bn) including
the benefit from higher activity in our client's defined contribution pension
business.
Net flows
- Net outflows reflect outflows from heritage business in run-off,
largely being offset by inflows from growing workplace pensions.
- Net outflows of £4.3bn in 2024 (2023: £1.1bn outflow),
representing (2.8)% of opening AUM compared with (0.8)% in 2023.
Investment performance
% of AUM performing(1) 1 year 3 years 5 years
2024 2023 2024 2023 2024 2023
restated restated restated
Equities 32 27 15 17 25 48
Fixed income 83 81 90 75 93 84
Multi-asset 85 12 36 15 71 22
Real assets 30 30 46 56 56 45
Alternatives 94 98 100 98 100 98
Quantitative 98 100 90 100 96 95
Liquidity 100 100 100 95 100 97
Total 77 55 60 51 71 58
The investment performance measure now includes our large and growing index
tracking alternatives and quantitative AUM, where we continue to deliver well
on expected outcomes for clients.
Investment performance on a one-, three- and five-year basis has improved,
exceeding 70% on both a one- and five-year basis. Performance has improved to
60% on a three-year basis, up from 51% in 2023. Strong investment returns and
performance have continued within alternatives, fixed income, liquidity and
quantitative strategies. Equities performance remained challenged, including
the impact of our AUM bias towards Asia and emerging markets.
See page 38 for further details on our investment performance.
1. The scope of the investment performance calculation has been extended to cover
all funds that aim to track or outperform a benchmark, with certain assets
excluded where this measure of performance is not appropriate or expected.
2023 comparatives have been restated. As at 31 December 2024, 80% (31 December
2023 restated: 75%) of AUM is covered by this metric. Further details about
the calculation of investment performance and the change in scope are included
in the Supplementary information section.
Overall performance
Adjusted operating profit IFRS profit before tax Net capital generation Net flows
£255m £251m £238m £(1.1)bn
Adjusted operating profit AUMA Net flows
2024 2023 2024 2023 2024 2023
Segmental summary £m £m £bn £bn £bn £bn
ii 116 114 77.5 66.0 5.7 2.9
Adviser 126 118 75.2 73.5 (3.9) (2.1)
Investments(1) 61 50 369.7 366.7 (9.0) (15.3)
Other(2) (48) (33) - - - -
Eliminations (11.0) (11.3) 1.1 0.6
Total 255 249 511.4 494.9 (6.1) (13.9)
Liquidity net flows 5.0 (3.7)
Total net flows (including liquidity) (1.1) (17.6)
The adjusted operating loss in Other increased to £48m (2023: £33m)
primarily reflecting higher retained corporate costs.
Assets under management and administration
AUMA increased by 3% to £511.4bn (2023: £494.9bn):
- Total net outflows of £1.1bn includes liquidity net inflows of
£5.0bn. Excluding liquidity, net outflows were £6.1bn, with outflows in
Investments and Adviser partly offset by positive flows in ii of £5.7bn.
- Market and other movements of £24.2bn, mainly reflecting positive
movements in Investments, driven by stronger markets primarily within
quantitatives, alternative investment solutions, equities and multi-asset
partly offset by real estate.
- Net impact of corporate actions of £(6.6)bn following the
disposal of our European-headquartered Private Equity business in April 2024,
partly offset by the acquisition of closed-end funds from First Trust Advisors
in July 2024 and September 2024.
Results summary
2024 2023
Analysis of profit £m £m
Adjusted net operating revenue 1,321 1,398
Adjusted operating expenses (1,066) (1,149)
Adjusted operating profit 255 249
Adjusted net financing costs and investment return 99 81
Adjusted profit before tax 354 330
Adjusting items including results of associates and joint ventures (103) (336)
IFRS profit/(loss) before tax 251 (6)
Tax (expense)/credit (3) 18
IFRS profit for the year 248 12
Adjusted net financing costs and investment return
Adjusted net financing costs and investment return resulted in a gain of £99m
(2023: gain £81m):
- Investment gains, including from seed capital and co-investment
fund holdings of £19m (2023: losses £3m).
- Net finance income of £58m (2023: £50m) reflecting a higher rate
of interest on cash and liquid assets.
- Lower net interest credit relating to the staff pension schemes of
£22m (2023: £34m) reflecting a lower opening pension surplus and costs
relating to de-risking the pension scheme.
1. Investments net flows exclude Institutional & Retail
Wealth liquidity.
2. Adjusted operating loss consists of adjusted net operating
revenue £9m (2023: £9m) and adjusted operating expenses £57m (2023: £42m).
Adjusted operating expenses in 2024 includes the impact of increased retained
central Group costs.
Adjusting items
2024 2023
£m £m
Restructuring and corporate transaction expenses (100) (152)
Amortisation and impairment of intangible assets acquired in business (129) (189)
combinations
and through the purchase of customer contracts
Profit on disposal of subsidiaries and other operations 89 79
Profit on disposal of interests in joint ventures 11 -
Change in fair value of significant listed investments (27) (178)
Dividends from significant listed investments 56 64
Share of profit or loss from associates and joint ventures 24 1
Reversal of impairment of interests in joint ventures - 2
Other (27) 37
Total adjusting items including results of associates and joint ventures (103) (336)
Restructuring and corporate transaction expenses were £100m (2023: £152m).
Restructuring costs of £88m (2023: £121m) mainly related to our
transformation programme including related severance expenses, as well as
separate platform transformation expenses. Corporate transaction costs of
£12m (2023: £31m) primarily related to prior period transactions.
Amortisation and impairment of intangible assets acquired in business
combinations and through the purchase of customer contracts reduced to £129m
(2023: £189m), mainly due to the lower goodwill impairments of £5m (2023:
£62m). The impairment of goodwill in 2024 relates to Finimize and includes
the impact of higher anticipated losses. Further details are provided in Note
13.
Profit on disposal of interests in subsidiaries and other operations primarily
relates to the sale of our European-headquartered Private Equity business. The
2023 profit relates to the sales of our discretionary fund management business
and our US Private Equity and Venture Capital business. See Note 1 for further
details.
Profit on disposal of interest in joint ventures relates to the sale of our
shareholding in Virgin Money UTM that completed on 2 April 2024. See Note 14
for further details.
Change in fair value of significant listed investments of £(27)m from market
movements is detailed below:
2024 2023
£m £m
Phoenix (27) (77)
HDFC Asset Management - (96)
HDFC Life - (5)
Change in fair value of significant listed investments (27) (178)
The final HDFC Life and HDFC Asset Management stakes were sold on 31 May 2023
and 20 June 2023 respectively.
Dividends from significant listed investments of £56m relates to our
shareholding in Phoenix (2023: Phoenix £54m and HDFC Asset Management £10m).
Share of profit or loss from associates and joint ventures increased to a
profit of £24m (2023: £1m). HASL profit increased to £26m (2023: £3m)
including investment-related gains due to favourable investment market
conditions.
Other includes a £15m expense relating to the release of a prepayment for the
Group's purchase of Phoenix's trustee investment plan and a £16m expense
relating to an adjustment to revenue recognised in prior periods. Other
adjusting items in 2024 also includes a £11m gain for net fair value
movements in contingent consideration. See Note 11 for further details of
other adjusting items.
See pages 184 and 198 for further details on adjusted operating profit and
reconciliation of adjusted operating profit to IFRS profit. Further details on
adjusting items are included in the Supplementary information section.
Tax policy
We have important responsibilities in paying and collecting taxes in the
countries in which we operate. Our tax strategy is therefore, guided by a
commitment to high ethical, legal and professional standards and being open
and transparent about what we are doing to meet those standards.
Tax expense
The total IFRS tax expense attributable to the profit for the period is £3m
(2023: credit £18m), including a tax credit attributable to adjusting items
of £67m
(2023: credit £68m), which results in an effective tax rate of 1% (2023:
300%). The difference to the UK Corporation Tax rate of 25% is mainly driven
by:
- Realised gains on disposal of subsidiaries and interests in joint
ventures not being subject to tax.
- Dividend income and fair value movements from our investments in
Phoenix not being subject to tax.
- Profits arising in joint ventures included on a net of tax basis.
- Prior year adjustments reflecting the non taxable release of
accounting provisions
The tax expense attributable to adjusted profit is £70m (2023: £50m), an
effective tax rate of 20% (2023: 15%). This is lower than the 25% UK rate
primarily due to pension scheme surplus movements included on a net of tax
basis and the effect of lower tax rates, and the use of deferred tax assets on
overseas profits.
Total tax contribution
Total tax contribution is a measure of all the taxes abrdn pays to and
collects on behalf of governments in the territories in which we operate. Our
total tax contribution was £362m (2023 £449m). Of the total, £135m (2023:
£201m) was borne by abrdn whilst £227m
(2023: £248m) represents tax collected by abrdn on behalf of the tax
authorities. Taxes borne mainly consist of corporation tax, employer's
national insurance contributions and irrecoverable VAT. The taxes collected
figure is mainly comprised of pay-as-you-earn deductions from employee payroll
payments, employees' national insurance contributions, VAT collected and
income tax collected on behalf of HMRC on platform pensions business.
The reduction in our total tax contribution includes a reduction in our
ongoing VAT liability following the sales of our discretionary fund management
and European Private Equity businesses, the impact of headcount reduction on
payroll taxes and the effect of taxes paid on the disposal of our final stake
in HDFC AMC in 2023.
You can read our tax report on our website www.abrdn.com/annualreport
Earnings per share
- Adjusted diluted earnings per share increased to 15.0p (2023:
13.9p) due to the higher adjusted profit after tax and the benefit from share
buybacks in 2023.
- Diluted earnings per share was 13.0p (2023: 0.1p) reflecting the
factors above, and also the benefit of profit on disposal of subsidiaries and
interests in joint ventures.
Dividends
The Board has recommended a final dividend for 2024 of 7.3p (2023: 7.3p) per
share, resulting in a total dividend for the year of 14.6p (2023: 14.6p).
The final dividend is subject to shareholder approval and will be paid on
13 May 2025 to shareholders on the register at close of business on 28 March
2025. The final dividend payment is expected to be £130m.
External dividends are funded from the cumulative dividend income that abrdn
plc receives from its subsidiaries and other investments (see below for
details of cash and distributable reserves). The need to hold appropriate
regulatory capital is the primary restriction on the Group's ability to pay
dividends. Further information on the principal risks and uncertainties that
may affect the business and therefore dividends is provided in the Risk
management section.
The adjusted capital generation trend and related dividend coverage is shown
below:
Liquidity and capital
Cash and liquid resources and distributable reserves
Cash and liquid resources remained robust at £1.7bn at 31 December 2024
(2023: £1.8bn). These resources are high quality and mainly invested in cash,
money market instruments and short-term debt securities. Cash and liquid
resources held in abrdn plc were £0.4bn (2023: £0.4bn).
Further information on cash and liquid resources, and a reconciliation to IFRS
cash and cash equivalents, are provided in Supplementary information.
At 31 December 2024 abrdn plc had £2.9bn (2023: £3.1bn) of distributable
reserves.
IFRS net cash flows
- Net cash inflows from operating activities were £213m (2023:
£221m) which includes outflows from restructuring and corporate transaction
expenses, net of tax, of £53m (2023: £78m).
- Net cash inflows from investing activities were £258m (2023:
£542m) and primarily reflected the maturity of cash invested in money market
instruments which were not classified as cash equivalents, and the net
proceeds from the Group's disposal of its European-headquartered Private
Equity business.
- Net cash outflows from financing activities were £342m (2023:
£711m) with the decrease mainly due to outflows for the share buyback in
2023.
The cash inflows and outflows described above resulted in closing cash and
cash equivalents of £1,335m as at 31 December 2024 (2023: £1,210m).
IFPR CET1 own funds
The indicative CET1 own funds at 31 December 2024 were £1,465m (2023:
£1,466m).
Key movements in CET1 own funds and respective coverage are shown in the table
below.
2024 2023
Analysis of movements in CET1 own funds and respective coverage £m % £m %
Opening CET1 own funds 1,466 139 1,301 123
Sources of capital
Adjusted capital generation 307 30 299 28
HDFC Life and HDFC Asset Management(1) sales - - 576 55
Disposals(2) 74 7 137 13
Uses of capital
Restructuring and corporate transaction expenses (net of tax) (69) (7) (121) (12)
Dividends (260) (25) (267) (25)
Share buyback - - (302) (29)
Acquisitions(3) (20) (2) (152) (14)
Other (33) (3) (5) -
Total 1,465 139 1,466 139
The full value of the Group's significant listed investment in Phoenix, and
the IAS19 staff defined benefit pension scheme surplus are excluded from the
capital position under IFPR.
A summary of our CET1 capital coverage is shown in the table below.
2024 2023
CET1 capital coverage £m £m
CET1 own funds 1,465 1,466
Total own funds threshold requirement (1,054) (1,054)
CET1 capital coverage 139% 139%
Note 42 of the Group financial statements includes a reconciliation between
IFRS equity and surplus regulatory capital and details of our capital
management policies.
Capital generation
Adjusted capital generation, which shows how adjusted profit contributes to
regulatory capital, increased by 3% to £307m. Net capital generation
increased by £60m to £238m and included the benefit of lower restructuring
costs.
2024 2023
£m £m
Adjusted profit after tax 284 280
Less net interest credit relating to the staff pension schemes (22) (34)
Less interest paid on other equity (11) (11)
Add dividends received from associates, joint ventures and significant listed 56 64
investments
Adjusted capital generation 307 299
Less restructuring and corporate transaction expenses (net of tax) (69) (121)
Net capital generation 238 178
IFRS net assets
IFRS net assets attributable to equity holders was stable at £4.8bn (2023:
£4.9bn) reflecting the IFRS profit before tax offset by dividends paid in the
period:
- Intangible assets decreased to £1.5bn (2023: £1.6bn) primarily
due to regular amortisation. Further details are provided in Note 13.
- The principal defined benefit staff pension scheme, which is
closed to future accrual, continues to have a significant surplus of £0.8bn
(2023: £0.7bn). We have reached agreement with the trustee of the defined
benefit pension plan to utilise part of the existing surplus to fund the cost
of providing defined contribution benefits to current employees. This is
expected to result in an annual benefit of c.£35m to net capital generation
from July 2025 with an annual review of other options including an insurance
buyout. This agreement enables the Group to unlock value from the plan, while
maintaining the surplus and retaining optionality. See Note 31 for further
details.
- Financial investments reduced slightly to £1.8bn (2023: £2.0bn).
At 31 December 2024, financial investments included £530m (2023: £557m) in
relation to our stake in Phoenix.
1. Capital benefit of HDFC Asset Management sales reflects the
pre-tax proceeds.
2. European-headquartered Private Equity business, Virgin Money
UTM, threesixty business with related intangibles and partial disposal of
Focus Business Solutions. Discretionary fund management with related
intangibles and US Private Equity businesses in 2023.
3. First Trust funds in 2024 and Tekla and Macquarie funds in
2023.
Viability statement
Longer-term prospects
The Directors have determined that three years is an appropriate period over
which to assess the Group's prospects. In addition to aligning with our
business planning horizon, this reflects the timescale over which changes to
major regulations and the external landscape affecting our business typically
take place.
The Group's prospects are primarily assessed through the strategic and
business planning process. These prospects have been enhanced as a result of
actions taken to simplify the business.
The assessment reflects (i) the Group's focus on its strategic priorities as
set out on pages 4 to 11 and how this is expected to drive client-led growth
in abrdn's three businesses and (ii) progress made in implementing the
transformation programme announced in January 2024.
In forming their assessment of the Group's longer-term prospects, the
Directors have also taken into account:
- The Group's capital position as set out on page79.
- The Group's substantial holdings of cash and liquid resources as well as
holdings in listed equity investments, as set out on page79.
- The Group's principal and emerging risks as set out on pages 82 to 85.
Assessment of prospects
The Directors consider the Group's focus on its strategic priorities will
deliver growth while allowing the Group to maintain its regulatory capital
position and the dividend policy described on page 67.
Viability
The Directors consider that three years is an appropriate period for assessing
viability as this is in line with the horizon used for our business planning
and stress testing and scenario analysis processes.
In considering the viability statement, the Directors completed a robust
assessment of the principal and emerging risks facing the Group in order to
understand potential vulnerabilities for the business. In addition to this,
the Directors assessed the Group's viability taking into account:
- Output from the Group's business planning process.
- Results from the Group's stress testing and scenario analysis
programme.
- Results from the Group's exploration of reverse stress tests.
- Work performed in connection with the UK's FCA and PRA rules on
operational resilience.
The business planning process includes the projection of profitability,
regulatory capital and liquidity over a three-year period, based on a number
of assumptions. This includes assumptions regarding the economic outlook which
reflects various factors, such as the changing market conditions following the
significant geopolitical and economic developments in recent years.
The Group has no debt maturing over the next three years and based on business
planning projections, there is no expectation that the Group will need to draw
down on its £400m revolving credit facility described on page 144.
The Group's stress testing and scenario analysis programme develops financial
projections over a three-year horizon in response to a range of severe but
plausible stresses to the business plan to understand the Group's financial
resilience. This includes exploring (i) the impacts of market-wide stresses,
(ii) stresses that are specific to abrdn, and (iii) stresses that combine both
these elements. Whilst all of the Group's principal risks could potentially
impact on the Group's financial resilience, our combined stress testing
scenarios focused on those risks expected to have the most significant impact:
- Financial risk was considered through stresses to market levels,
flows, margins, and expenses. Whilst a range of economic scenarios was
explored, the most onerous combined scenario included (i) net outflows of
£112bn relative to the business plan and (ii) a market shock with an impact
that might be expected around 1-in-20 years. This included: equity markets
falling approximately 24% in Q1 2025 before recovering from Q3 2025 to the end
of 2027; the UK Base rate was assumed to fall to 0.1% by Q1 2026 where it
remains. Cost inflation was assumed to drive variable costs 5% higher.
- Operational risks were considered by including an assumed £50m
operational loss in the combined scenario. This was assumed to represent the
impact of a severe failure in Q1 2025 relating to one of the Group's important
business services identified as part of the Group's operational resilience
planning activity. The combined scenario also assumed that future operational
changes planned under the Group's transformation activity fail to deliver cost
savings with £20m of additional costs incurred in stabilising changes
previously implemented.
All the scenarios explored resulted in the Group experiencing reduced
profitability and, in some cases, losses over the planning horizon.
Projections of capital and liquid resources fell as a result of these losses.
For the most onerous combined scenario, the strength of the Group's financial
position meant the Group was able to maintain sufficient capital and liquid
resources to remain above its regulatory requirements.
In the event that the Group was to experience more severe stresses than those
explored under the stress testing and scenario analysis programme, the Group
has a range of management actions it would be able to take, including a number
of sizeable management actions wholly within the Group's control. These
include drawing down on the Group's revolving credit facility, reducing
discretionary expenditure, and taking dividend management actions.
The results of the stress testing and scenario analysis also support the view
that Group is resilient to adverse climate change over the planning horizon.
The stresses to market levels and flows explored in the most onerous combined
scenario are deemed to capture the possible market and client-led responses to
adverse climate change over this period. Any costs that would be incurred in
responding to adverse climate change are considered to be covered by the
additional costs included in the most onerous combined scenario.
Reverse stress testing involves exploring the quantitative and/or qualitative
impacts of extreme scenarios which could threaten the viability of our
business model. The Group has explored a number of these scenarios over recent
years including:
- Failure of Citigroup as a material outsourcer restricts the
operating ability of the Investments business.
- Malware infects abrdn systems and propagates rapidly across abrdn
networks leading to a loss of clients/customers.
- A single business is subject to multiple cyber-attacks causing
repeated disruption to operations and the loss of clients/customers.
- Loss of critical staff due to either severe illness/injury or
death due to pandemic or building disaster results in abrdn being unable to
operate.
- Failure of a key payment mechanism relied upon by the business
results in abrdn being unable to provide services required by
clients/customers.
- A ransomware attack on the abrdn Group leading to a loss of
clients/customers is followed a few months later by a cyber-attack on FNZ
impacting their ability to undertake processing for the Adviser business.
The previous exploration of these scenarios concluded they had a low
likelihood of occurrence and accordingly were not considered a threat to the
Group's viability. Work undertaken this year has confirmed there is no change
in this assessment which is supported by the diversification of revenues
arising from the Group's three businesses and the strength of the Group's
control environment which is regularly reviewed and assessed.
Operational resilience is the ability of firms to respond to and recover from
operational disruptions, protecting both clients/customers and market
integrity. Without operational resilience, there is a risk that firms are
unable to service their clients and customers for prolonged periods,
potentially threatening the firm's viability.
To support the Group's operational resilience and align with UK regulatory
expectations the Group annually reviews and approves important business
services, impact tolerance thresholds, and operational resilience
self-assessments. The Group also takes necessary measures to comply with
operational resilience regulations in overseas jurisdictions, such as
Singapore and Ireland.
By the end of March 2025 the FCA/PRA require in-scope firms to have performed
mapping and testing so they can remain, and operate consistently, within the
impact tolerances firms have set for their important business services. The
Group has undertaken several key initiatives to enhance readiness for this
deadline and improve our overall resilience. This included performing
increased scenario testing and improving technology and business processes.
The Group is committed to continuously improving its operational resilience
and defences against risks. This ensures compliance with regulatory
expectations and helps reduce the risk of non-viability.
Assessment of viability
The Directors confirm that they have a reasonable expectation that abrdn plc
will be able to continue in operation and meet its liabilities as they fall
due over the next three years.
Managing risk for better outcomes
Our approach to risk management
A strong risk and compliance culture underpins our commitment to put clients
and customers first and safeguard the interests of our shareholders. Our Board
has ultimate responsibility for risk management and oversees the effectiveness
of our Enterprise Risk Management Framework (ERMF).
ERMF
The ERMF underpins risk management throughout our business. We operate 'three
lines of defence' with defined roles and responsibilities. We continually
evolve our framework to meet the changing needs of the company and to make
sure it keeps pace with industry best practice. In 2024, improvements to the
framework included:
- Delivering a new approach to Risk and Control Self Assessments,
focused on key business outcomes and executive accountability.
- Implementing an enhanced risk appetite monitoring process.
- Simplification of abrdn's risk taxonomy, adopting a single version
taxonomy across the Group.
- Delivering improved risk reporting through the adoption of
consistent risk dashboards.
- Improved accessibility of the ERMF and its supporting materials.
Business risk environment
Business planning assumptions are more prone to external market developments
than before.
The global political and economic environment is in flux. Political elections
in the US has brought about a period of greater policy uncertainty in the area
of global trade, strategic competition with China, developments in conflicts
in Europe and the Middle East, and sovereign debt management. Both energy
costs and cross-border trade costs could be adversely impacted leading to
upward pressure on inflation and stalling central banks' plans to further ease
their target interest rates. This increases the range of potential outcomes
across all asset classes.
Increased levels of sovereign indebtedness (measured by G7 debt/GDP levels)
could be the source of disruption to fixed income and currency markets in the
coming months or years.
Increasing equity market value concentration in a small number of technology
stocks (the so-called 'Magnificent Seven' phenomenon) poses challenges for
both passive and active asset management which could manifest as increased
market volatility at some stage.
Developments in technology and continued competitive pressure mean that
investment firms must continue to transform their operating models in order to
preserve margins and/or build capital to reinvest for the future.
Operational resilience is a key focus as the risks from cyber, technology and
third-parties continue to evolve. We continue to build our capabilities and
develop our mitigation plans to deal with areas of vulnerability in order to
minimise (and if necessary, mitigate) the risk of disruption to our clients
and customers.
Global regulators have extensive policy and supervisory agendas which need to
be addressed. We are working diligently and steadfastly to meet our
regulators' expectations, especially in the areas of consumer duty,
operational resilience and anti-financial crime.
Evolving and emerging risks
We are vigilant to risks that could crystallise over different horizons and
impact our strategy, operations and our clients. These risks vary in nature as
they cover geopolitical, economic, societal, technological, legal, regulatory
and environmental themes. We distil internal and external research to consider
how risks could emerge and evolve.
Some notable risks (and opportunities) for our business include adoption of
modern technologies, uncertainty driven by geo-politics, unprecedented market
shifts, evolving cyber threats and climate change.
Sustainability risks
We have a responsibility to shareholders, clients, customers and all
stakeholders to assess, report on, manage and mitigate our sustainability
risks. As an investment firm, we need to consider the impact of our corporate
activities while making investments in line with client mandates. We continue
to deepen our understanding of these risks for the benefit of all stakeholders
and use these insights to advocate for positive policy change.
As a global investment firm, we are also mindful of the different and changing
political and regulatory perspectives on operating and investing with
sustainability considerations in mind.
Principal risks and uncertainties
We categorise our risks across nine principal risk categories which have both
internal and external drivers. This reduction from previous years, where we
reported on 12 principal risks, ensures we remain focused on our key exposures
and supports our corporate priority of simplifying the way we think about and
manage our business.
Within our ERMF, we have developed more detailed taxonomy risks under these
principal risk categories. This allows us to systematically monitor the risk
profile of our business.
Principal and emerging risks are subject to active oversight and robust
assessment by the Board. The principal risks are described in the following
table.
Risk to our business How we manage this risk
1 Strategic risk
- These are risks that could prevent us from achieving our strategic aims and We continue to simplify our business model by transforming our operating model
successfully delivering our business plans. and the diversification of the revenue base. This includes the disposal of
non-core activities.
- These could include failing to meet client expectations, poor strategic
decision-making or failure to adapt. Informed by our analysis of the key market segments in which we operate, we
explore specific acquisition possibilities with a view to strengthening our
- A key external risk which could impact on the achievement of the strategy capabilities.
relates to geopolitical and macroeconomic developments.
We maintain focus on geopolitical and macroeconomic developments to understand
and manage implications.
2 Financial risk
- This is the risk of having insufficient financial resources, suffering Our business planning is focused on generating sustainable capital growth.
losses from adverse markets or the failure or default of counterparties. It is
impacted by our flows experience, global market conditions and the fees we Risks to that plan are informed by projections of our financial resources
charge on investment mandates, platforms and wealth management services. under a range of stress scenarios that help us calibrate buffers that ensure
financial resilience at Group and subsidiary level.
Our Group Capital and Dividend Policy ensures that we optimise our holding of
financial resources across the Group having regard, inter alia, for regulatory
requirements that apply at Group and subsidiary level.
3 Conduct risk
- With a mission 'to help our clients and customers to be better investors', Our Group is organised to ensure clear focus on our clients and customers in
our business is focused on meeting our clients' expectations for good interactive investor, Adviser and Investments. This translates into our
investment performance and service delivery. There is a risk that we fail to client-first culture and the focus of our operational and change plans.
achieve this through our operational activities or through the implementation
of our change programmes. Our ERMF supports the management of conduct risk with clear expectations
around conduct goals and responsibilities. We have a clear Global Code of
Conduct and have implemented the FCA's Consumer Duty.
Risk to our business How we manage this risk
4 Regulatory and legal risk
- High volumes of regulatory change can create interpretation and Our relationships with regulators are based on trust and transparency while
implementation risks. our compliance and legal teams support senior managers across our business.
- Divergences between different regulators can create operational Our three lines of defence model supports the embedding of compliance
complexities. expectations across the business and oversight with these expectations.
- Compliance failures can lead to poor customer and client outcomes, We have established compliance advisory, monitoring and testing activity
sanctions, reputation damage and income loss. across the Group.
- As we engage with a wide number of external parties, we have to be vigilant We actively monitor developments and engage with our regulators and industry
to the risk that these parties are connected with criminal behaviour, or groups so that we respond effectively to new regulatory policy initiatives.
subject to sanctions by national or global authorities.
5 Process execution
- This is the risk that processes, systems or external events could produce We instil a culture of 'getting things right first time' so as to minimise the
operational errors that impact client, customer or shareholder outcomes. cost of 'failure demand'.
- We are vigilant to the risk that our Transformation programme and other We have established processes for reporting and managing incidents, risk
change initiatives could adversely impact our key business outcomes. events and issues. We monitor underlying causes of error to identify areas for
action, promoting a culture of accountability and continuously improving how
we address issues. We dealt with incidents using established incident
management processes.
We have established processes for managing change including the implementation
of our Transformation programme so that risks are assessed and managed.
6 People
- Our people are our greatest asset and the engagement and stability of our Through our ongoing management activities and periodic staff surveys, we
workforce is critical to the delivery of our key business outcomes. maintain a close focus on employee engagement, morale and attrition levels.
- Attrition in key teams can be disruptive and costly. We look to ensure that abrdn provides competitive compensation and benefits in
the labour markets where we have operations.
We use targeted approaches to support retention and recruitment for our key
business functions.
Risk to our business How we manage this risk
7 Technology security and resilience
- There is a risk that our technology may fail to keep pace with business We have an ongoing programme to invest in and enhance our IT infrastructure
needs. controls. We benchmark our IT systems environment to identify areas for
improvement and further investment.
- With the increasing sophistication of external threat actors, there is also
the significant risk of unauthorised access of our systems and cyber-attack. We maintain heightened vigilance for cyber intrusion, with dedicated teams
monitoring and managing cyber security risks. We carry out regular testing on
- Our third-party suppliers also present risks to our technology estate. penetration and crisis management.
- These risks are relevant to a wide range of potential threats to the Mindful of internal (business) changes and the evolution of the external
business including internal failure, external intrusion, supplier failure and threat landscape, we continue to strengthen our operational resilience and
weather events. cyber defences. Crisis management and contingency planning processes are
regularly reviewed and tested. We will implement changes related to the UK
Operational Resilience Regulations (in March 2025) and the EU Digital
Operational Resilience Act (in January 2025).
8 Third party
- We rely on third parties to deliver key business activities and services and Our Third Party Risk Management framework is well established.
are exposed to a variety of delivery, operational, regulatory and reputational
risks as a result. We have clear processes for the oversight, monitoring and management of third
party relationships, especially our strategic suppliers.
9 Sustainability
- Sustainability risk covers, but is not limited to, environmental, social and We have a sustainability strategy in place to ensure we are transitioning as a
governance risks, which can lead to material impacts by and for our business, business.
clients, customers, suppliers and communities.
We measure and manage our most material corporate environmental impacts
- Disclosure-based regulatory frameworks are currently not interoperable including our carbon footprint.
globally, which increases the risk of non-compliance across our jurisdictions.
We have well established investment processes to ensure that we run investment
- We seek external assurance and guidance to ensure we are avoiding any risk portfolios in line with our client mandates.
of greenwashing throughout our communications, disclosures and reports.
We carefully monitor the content of our corporate and client disclosures.
- The politicisation of the sustainability agenda can add complexity to our
business operations. We engage with policymakers, clients, customers, suppliers, our people and our
communities to ensure we understand their expectations, gather data and
continue to stay compliant and consistent in our approach.
The cover to page 85 constitute the Strategic report which was approved by the
Board and signed on its behalf by:
Jason Windsor
Chief Executive Officer
abrdn plc
(SC286832)
3 March 2025
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