AJ Bell (AJB) 2017年年度報告「LSE」.pdf

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1、Annual Report and Financial Statements 2017Investing made easyHoldings LimitedStrategic reportHighlights 4Chairmans statement 5Chief Executive Officers report 7Financial review 10The AJ Bell Way 12Our product propositions 14Easiest platform to use 16First class service 18Brand awareness 20Our people

2、 and corporate social responsibility 22Principal risks and uncertainties 24Governance Board of Directors 30Executive Management Board 31Directors report 32Statement of directors responsibilities in respect of the Strategic report,Directors report and the financial statements 36Independent auditors r

3、eport to the members of AJ Bell Holdings Limited 37Financial statementsConsolidated income statement 40Consolidated statement of financial position 41Consolidated statement of changes in equity 42Consolidated statement of cash flows 43Notes to the consolidated financial statements 44Company statemen

4、t of financial position 78Company statement of changes in equity 79Notes to the Company financial statements 80Unaudited five-year summary 84Other informationDefinitions 88Company information 89Contents4Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial stateme

5、ntsGovernanceStrategic reportKey performance indicatorsKey financial informationRevenueProfit before tax75.6m21.7m17%29%30 September 201630 September 201730 September 201730 September 201664.5m16.8mNet assetsReturn on assets61.4m28%14%3%30 September 201730 September 201730 September 201630 September

6、 201653.8m25%Diluted earnings per shareTotal ordinary dividend42.60p28.25p30%10%30 September 201730 September 201730 September 201630 September 201632.73p25.75pHighlightsAssets under administration39.8 bn25%Total number of retail customers164,55717%20178.9bn8.5bn201630.9bn23.3bn2016201723,282 117,16

7、9141,20723,350PlatformNon-platformPlatformNon-platform5Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportAt AJ Bell we help people invest and our customers remain at the heart of everything we do.Our aim is to become the eas

8、iest platform to use and,in a market that is constantly evolving,our continued investment in innovative technology is critical in delivering this ambition.Overview of the yearThe Group continues to grow strongly,with total retail customers increasing by 17%from 140,451 to 164,557 during the financia

9、l year and Assets under Administration(AUA)growing by 25%from 31.8bn to 39.8bn.The growth in AUA was largely attributable to the record customer inflows,supported by favourable market movements.The underlying growth in the customer base and efficiency of our operating model saw the Groups profit bef

10、ore tax rise by 29%this year from 16.8m to 21.7m.We continued to develop our product propositions during the year and launched the first AJ Bell funds for our customers.The five VT AJ Bell Passive funds within the range have a simple,transparent charging structure,are among the lowest-cost in the ma

11、rket for a comparable product and are designed to make investing easier for customers.The VT AJ Bell Passive fund range has been well received by our customers and we aim to provide further simple,low-cost investment solutions in the future.GovernanceThe Board is committed to developing the corporat

12、e governance structures of the Group to ensure they meet best practice.There were no changes to the composition of the Board or its responsibilities during the year,and it continues to provide strong support and suitable challenge to the Executive Management Board(EMB)in order to ensure the Groups s

13、trategy is appropriate,achievable and ultimately delivered.The Board has met ten times during the year and is supported by four sub-committees:Audit,Risk&Compliance,Remuneration and Nominations.The Audit and Risk&Compliance Committees both met four times,the Remuneration Committee three times and th

14、e Nominations Committee once.The Board and its sub-committees achieved 100%attendance for all meetings.Responsibility for the day-to-day management of the business remains with the EMB.During the year Louis Petherick was appointed as Chief Risk Officer,replacing Richard Taylor who will remain within

15、 the business in a consultancy capacity.I am pleased to present our annual report for the year ended 30 September 2017,highlighting another year of double-digit growth for the Group with record levels of both revenue and net new customers acquired.This strong performance is underpinned by our award-

16、winning service,the quality of our product propositions and a robust,scalable and efficient operating model.Les Platts ChairmanChairmans statement6Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportShareholder returns The Boa

17、rd has declared a final dividend of 15.5p per share,taking the total dividend for the year to 28.25p per share,compared to 25.75p in the previous year.The 10%increase in dividend reflects the strong growth in the financial performance of the Group.The Board continues to adopt a progressive dividend

18、policy,which is balanced with holding sufficient funds for future investment and our regulatory capital requirements.Earlier this year,like many others across the industry,we were advised by the FCA as part of their Supervisory Review and Evaluation Process(SREP),that we are required to hold additio

19、nal regulatory capital.The increase for the Group was significantly lower than the comparable average across the industry over the last four years as reported in KPMGs October 2017 benchmarking survey.The benchmarking survey also indicates that the Groups surplus,above its regulatory requirements,co

20、ntinues to be considerably higher than the average across the industry.Our strong financial position and prudent approach to managing the balance sheet,ensure we are well placed to absorb increases in regulatory capital requirements,whilst having sufficient funds available for further investment in

21、the business.ConclusionWe have enjoyed strong financial growth during the year and,with a record level of net new customers acquired,our advised and execution-only platform propositions are among the fastest-growing in their respective markets.Over the last 5 years,the average annual growth rate of

22、our platform customer base and AUA has been in excess of 20%.Our focus on delivering strong product propositions,scalable infrastructure and excellent customer service through innovative technology ensure we are ideally placed to capitalise on the further opportunities created within the expanding p

23、latform market.Our solid capital base,financed entirely from equity,ensures we have sufficient funds to continue investing in the future of the business.We look forward to next year with confidence to build on our successes and deliver further progress.Les Platts ChairmanChairmans statement7Strategi

24、c reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportAndy Bell Chief Executive OfficerChief Executive Officers report 2017 HighlightsThe value of asset inflows from incoming transfers,contributions and subscriptions totalled 7.7bn(2016

25、:4.5bn)for the year,which was further enhanced by favourable market movements,with the FTSE All Share rising by 8%in the period.Asset outflows remained low,with the customer retention rate of our two core platform product propositions remaining high at 95%.Revenue grew by 17%during the year with all

26、 our income streams benefiting from the underlying growth in our customer base and AUA.Easiest platform to useOur aim is to become the easiest platform to use.The Groups digital strategy and investment in innovative technology are critical to success in the digital era.We are tireless in our efforts

27、 to develop new ideas and new enhancements that will give the best possible customer journey and experience.To help implement the Groups strategy,we created an innovation group earlier this year with the sole focus of generating new ideas and technological solutions to ensure our products remain mar

28、ket-leading.We are currently working on a number of initiatives for our adviser-based proposition AJ Bell Investcentre,including an improved new business application process and a brand-new customer area.This year,we have also introduced straight-through cash transfer processing and transfer case tr

29、acking,making our service more efficient for advisers.AJ Bell Youinvest,our direct to customer execution-only proposition,has also been significantly enhanced this year,with a simplified application process,the launch of a Lifetime ISA(LISA),new dividend reinvestment functionality and longer opening

30、 hours to support US dealing.We also developed an online filtering tool that lists the AJ Bell favourite funds to help customers find the solution that best meets their investment goal.The favourite funds are a best of breed selection of funds,assessed by their value for money,track record with the

31、market and the quality of the management team.It has been over a year since we first ventured into the investment management market and launched our Managed Portfolio Service(MPS).We have been delighted with how well the MPS has been received,and it has become clear that there is growing demand for

32、simple low-cost,passive investment solutions.Earlier this year we launched our first fund range,the VT AJ Bell Passive funds,which comprise of five passive funds,ranging from cautious to adventurous.In line with our philosophy of making investing easy,the funds have a clean,transparent and highly co

33、mpetitive charging structure.I am pleased to report that our continued strategy of placing our customers at the heart of our business,supported by ongoing investment in technology and innovation,has formed the basis of another successful year at AJ Bell.The key drivers of our performance,our custome

34、rs and AUA,grew by 17%and 25%respectively,with PBT increasing by 29%for the 12 months ended 30 September 2017.8Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportDuring the year we completed a review of our operating model to

35、 identify how we could increase the efficiency of our operations,improve our customer service and further enhance our scalability.It was concluded as part of this review that a centralised operational team in Manchester would be the best solution to achieve these aims and to support the future growt

36、h of the business.These plans were announced to the business during September and we will be relocating our stockbroking and investment services from Tunbridge Wells during 2018.PeopleWe aim to become one of the best companies to work for and our staff engagement framework focuses on the eight measu

37、res used within the Best Companies survey;the largest of its kind in the UK.In 2017 we recorded our highest-ever engagement score,moving closer to a coveted two star accreditation.This is testament to the on-going hard work and commitment of all our staff to work together in an effort to improve the

38、 work place.We have continued to strengthen our team with three key recruits this year.Peter Hopkins joins us as Technical Director,having previously worked at the Department for Work and Pensions and HMRC,where he led the pension simplification project that gave rise to ADay.In his new role,Peter o

39、versees our Technical Resources team and is helping us build on our lobbying activity with regulatory and government bodies.I am also delighted to welcome Gary Dale,who joins us as Sales Director for AJ Bell Investcentre.Garys thorough understanding of packaged investment solutions will be invaluabl

40、e as we look to build on the success we have experienced in recent years.We have also strengthened the Investment Management Team with the appointment of Kevin Doran as Chief Investment Officer.Kevin brings with him a wealth of knowledge and experience and will help us develop our offering of straig

41、htforward,low-cost investment solutions.We have a robust and thorough selection process to ensure we only recruit the best people with the right skills and behaviours for AJ Bell,ensuring they have a can-do attitude and the drive to succeed as our business grows and further opportunities arise.On a

42、sombre note,it is with great sadness that I report the tragic death of Mike Morrison,our Head of Platform Technical,in November 2017.His contribution to the business was enormous both on a professional and personal level.As one of the most respected men in his field,Mike was in great demand,but he a

43、lways remained warm,approachable and generous with his time.He will be greatly missed by us all and our immediate priority has been to provide Mikes wife and young daughter with as much support as possible.Market developmentsThe absence of any significant changes to the pension tax rules in the Nove

44、mber 2017 UK Budget was pleasing and we continue to campaign for stability and simplicity in the saving industry,in the view that it will benefit our customers and the industry alike in the long term.It has been over two years since the pension freedoms reforms were launched and they continue to be

45、very popular,with customers using the flexibility to take income from their pensions as and when they need.We have always believed that the reforms were positive for the industry and that retirement incomes will continue to be managed sensibly by the overwhelming majority of savers.The FCAs consulta

46、tion paper 17/16 Advising on Pension Transfers,has been expected for some time,and the bodys acceptance that the defined benefit transfer rules are no longer relevant to todays market is welcome.Defined benefit pension scheme members who have left their employer have been offered previously unseen h

47、igh multiples of their deferred pension,so many people have seen transferring as a sensible option.We continue to believe that advisers should have the choice to assess what is right for a customer from a neutral starting position.The final report of the FCAs Asset Management Market Study report was

48、 published in June 2017 and whilst well intended has resulted in a lack of specific immediate actions.The FCA expects the cost of active management to reduce as part of its proposed reforms,but there will be limited changes in the short term,with a further round of consultations proposed.There are m

49、easures in the final report which are aimed at improving the transparency of charges and making it easier for investors to review performance.These measures are positive for the industry and investors,but further clarity is required to understand how long the additional consultation will take and ho

50、w quickly the reforms will be implemented.We operate in a highly regulated environment that continues to evolve.The Markets in Financial Instruments Directive II(“MiFID II”)comes into effect on 3 January next year,with the aim of protecting investors and improving transparency in financial markets.A

51、dditionally,the General Data Protection Regulations(GDPR)will come into force from May 2018.We have invested significant time and effort to ensure we will be ready for both these changes.As part of its SREP on the Group,the FCA recently informed us that we are required to hold an additional amount o

52、f regulatory capital.In comparison to many of our peers,the additional capital requirement was relatively low and we were able to absorb it without impacting our dividend policy or future investment plans.This is testament to the strength of our financial position and prudent approach to managing ri

53、sks in the business.Chief Executive Officers report9Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportThe application of the Capital Requirements Directives IV will continue to evolve for investment firms,following the publi

54、cation of a number of recommendations by the EBA on 29 September 2017.Whilst the timing and process for implementing any changes is uncertain,we are confident that the Group is well positioned to meet the challenges of an evolving capital requirements regime in its sector.OutlookThe platform market

55、and UK saving industry continues to grow and the outlook remains very positive.We are well positioned to capitalise on this growth,with the strength of our product propositions,award-winning customer service and scalable infrastructure.We will continue to focus on our core aim to become the easiest

56、platform to use,investing in our digital strategy to improve the customer journey and to develop simple,low-cost investment solutions in-house.Over the next 12 months we plan to launch a brand new iPad application,a simplified illustration system and richer reporting functionality-all designed to en

57、hance our customers experience.Our target operating model for customer services will also be implemented next year,when the stockbroking operations will be relocated from Tunbridge Wells and centralised at our Manchester Head Office.The project will allow certain processes to be streamlined and syne

58、rgy gains will be targeted across the business once complete.Continued market volatility and uncertainty are likely in the run-up to Brexit,and in addition the UK base rate is projected to increase further next year following the first hike for ten years in November 2017,when it increased from 0.25%

59、to 0.50%.We believe these macro-economic conditions will present both challenges and opportunities in the market place and that our business model,combined with our forward-looking and innovative approach to meeting our customers needs,means we are well placed to succeed in our market.Finally,I woul

60、d like to offer my thanks to all the staff at AJ Bell,for their on-going commitment and for delivering another successful year for the business.We successfully relocated our head office to Exchange Quay during the year,providing our staff with a vibrant and modern office environment,with space to fa

61、cilitate our ambitious growth plans.Andy Bell Chief Executive OfficerChief Executive Officers report10Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportThe number of retail customers in the year increased by 24,106,represent

62、ing a 17%increase on the prior year.This strong flow of new business increased our total number of customers to 164,557 and AUA to 39.8bn at 30 September 2017(2016:31.8bn).The record growth in net new customers acquired was predominantly due to the Groups two core platform product propositions,AJ Be

63、ll Investcentre(AJBIC)and AJ Bell Youinvest(AJBYI).Michael Summersgill Chief Financial&Operating OfficerFinancial reviewFinancial performanceRevenueRevenue increased by 17%,from 64.5m to 75.6m for the year ended 30 September 2017.All revenue streams grew year-on-year with the exception of Media Serv

64、ices,due to the transition of Shares magazine to a digital publication with a slight reduction in subscription fees.Investment administration fees were up 8%at 41.3m(2016:38.1m),driven by the underlying growth in SIPP customers and AUA.Interest income continued to grow,despite a lower rate earned on

65、 cash deposits following the cut to the UK base rate in August 2016.Dealing and custody fees were up 37%at 30.6m(2016:22.3m).Dealing revenue increased by 24%due to the growth in the AJBYI and AJBIC customer base,coupled with high levels of customer dealing,a trend that has been seen since the UK mad

66、e a decision to leave the EU in June 2016.Custody fees increased by 41%due to the growth in the AJBYI and AJBIC customer base and higher asset values,which benefitted from a rise in global stock markets.Investment management service fees increased by 38%to 1.1m(2016:0.8m),reflecting the additional r

67、evenue generated from the AJ Bell range of investment solutions.This growth has partially been offset by a reduction in revenue derived from legacy funds,inherited as part of the acquisition,that have been discontinued in the year.Administrative expensesAdministrative expenses increased by 13%to 53.

68、8m(2016:47.7m).Staff costs remain our largest expense,increasing by 12%to 28.1m(2016:25.1m)with the average number of staff rising to 656(2016:607)reflecting the growth in the customer base and continued investment in our people.Non-staff costs totalled 25.7m,an increase of 3.1m in comparison to the

69、 prior year(2016:22.6m).Property costs included an additional 1.4m for unoccupied property costs with the lease on the old office expiring in August 2017.In addition,two provisions were raised during the year,the first for 0.5m relating to the restructuring costs associated with moving the stockbrok

70、ing operations from Tunbridge Wells to Manchester.The second for 1.1m related to a one-off tax liability.Total capitalised expenditure was 3.6m this year(2016:0.7m)of which 2.7m related to our new premises at Exchange Quay.11Strategic reportGovernanceFinancial statementsOther informationOther inform

71、ationFinancial statementsGovernanceStrategic reportProfit before tax(PBT)PBT increased by 29%to 21.7m for the year ended 30 September 2017,compared to 16.8m in the prior year.The increase in profitability is due to the strong growth in our customer base and operational efficiencies gained across the

72、 business.This has been enhanced by favourable trading conditions,with high customer dealing activity and increased asset balances on which our ad valorem fees are charged.TaxThe effective tax rate for the year was 19.5%(2016:20.7%).It is expected that the ongoing effective rate will continue to app

73、roximate the standard UK Corporation Tax rate.Earnings per shareDiluted earnings per share(DEPS)increased by 9.87p per share,from 32.73p per share last year to 42.60p per share in the current year,reflecting the Groups strong trading performance.Financial positionCapital and liquidityThe Groups fina

74、ncial position remains strong,with net assets totalling 61.4m at 30 September 2017(2016:53.8m).We benefit from a short working capital cycle that enables the majority of our profits to be converted to cash within the same financial year.Our cash balance was 42.1m at the year-end,an increase of 7%com

75、pared with the prior year(2016:39.5m).This cash surplus ensures that we have a significant liquidity buffer and funds available to invest in the business.We also hold a significant surplus of regulatory capital at all times.Further details can be found under our Capital Requirement Regulation(CRR)pa

76、rt eight disclosures(see page 33 on the Directors report for more information).DividendsThe Board has declared a final dividend of 15.5p per share,taking the total dividend for the year to 28.25p per share;a 10%increase when compared to the 25.75p payment in the previous year.This reflects the finan

77、cial strength of the Group,the Boards commitment to a progressive dividend policy and its positive outlook for the long-term prospects of the business.Michael Summersgill Chief Financial&Operating Officer12Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial stat

78、ementsGovernanceStrategic reportFirst class serviceOver the years we have developed a market-leading reputation for delivering excellent customer service,and our guiding principles ensure customers remain at the heart of everything we do.Our customer service,like our platforms are designed to make i

79、nvesting easier,we aim to respond to customers quickly and accurately,and by giving them the education content they need to make informed investment decisions.AJ Bell has never provided financial or personal investment advice.It operates exclusively on an execution-only basis-whether directed by the

80、 customer,their adviser or by its institutional customers.Our aim is to be a market-leading provider of investment products and administration services in the adviser and execution-only platform markets.This includes providing white labelling,dealing,custody and investment administration services fo

81、r other financial services firms.We help people to investOur primary objective is to help people invest and we aim to do this by thinking like our customers,making investing easier and leading our markets.Informed by our guiding principles,the AJ Bell Way is a framework we have developed to ensure o

82、ur strategy is driven by our passion to help people invest.The AJ Bell WayOur people and corporate social responsibilityOur success is built on delivering a first class service through the skills and passion of our people who bring our values to life across the business.At AJ Bell we have a strong s

83、ocial conscience.We encourage staff to give something back through charitable and voluntary activities,and we have introduced company initiatives to help raise the profile of local charities.Other informationFinancial statementsGovernanceStrategic report13Strategic reportGovernanceFinancial statemen

84、tsOther informationOther informationFinancial statementsGovernanceStrategic reportBrand awarenessAJ Bells aim is to become one of the best-known names in its markets.In 2017 we sought to further this aim by increasing both our public relations and sponsorship activities.Easiest platform to useOur st

85、rategic aim is for AJ Bells platforms to be the easiest to use.We plan to achieve this by delivering a rolling programme of changes and initiatives to improve the customer journey and experience.In the digital age,we believe the ability to generate and implement ideas at speed is paramount to achiev

86、ing success and with this in mind,we created an innovation group earlier this year.This innovation groups sole focus will be on creating new ideas and technologies to ensure our products remain at the cutting edge of the market.CUSTOMER SERVICESFINANCE&ASSURANCE GROWTH OUR CUSTOMERS OUR PEOPLEPropos

87、itions:match our customers needsPrice:very competitiveService:first classENERGETICWe neverstand stillSTRAIGHTFORWARDeasy and accessibleWe make investingFOCUSEDNot what they dontwhat they need.We give customersPERSONALNot robotsWe are human.PRINCIPLEDWe do the right thingINTELLIGENTWe knowour stuffWe

88、 think like our customers We lead our marketsWe make investing easierSALES OPERATIONS FINANCE OUR PEOPLE OUR CUSTOMERSSALES OPERATIONS FINANCE OUR PEOPLE OUR CUSTOMERSWe helppeopleto investPrincipal risks and uncertaintiesThe Board is committed to a continual process of improvement and embedment of

89、the risk management framework within the Group.This ensures that the business identifies both existing and emerging risks,and continues to develop appropriate mitigation strategies.14Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrateg

90、ic reportOur product propositionsAJ Bell InvestcentreAJ Bell Investcentre is an online investment product distributed by financial advisers.It offers award-winning SIPPs,ISAs,and GIAs,together with a market-leading range of investments and a highly competitive charging structure.AJ Bell Investcentre

91、 is one of the largest and fastest-growing advised products in the platform market.AJ Bell YouinvestAJ Bell Youinvest is an online product designed to provide an easy and cost-effective way for execution-only investors to take control of their investments.This award-winning product provides SIPPs,IS

92、As,Junior ISAs,LISAs and Dealing Accounts.It has a wide range of different investment types and a comprehensive research centre.AJ Bell Youinvest is one of the fastest-growing execution-only products in the platform market.AJ Bell Securities Custody Solution(formerly IMAS)AJ Bell Securities Custody

93、Solution is a fully integrated investment custody administration solution that allows wealth managers to focus on delivering a high quality service without the distraction of administering the assets.Our platform product propositionsTotal number of retail customers141,20721%Assets under administrati

94、on30.9 bn33%2016201730.9bn23.3bn20162017141,207117,16915Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportAJ Bell Platinum AJ Bell Platinum is a bespoke service that provides expert technical support,backed by a dedicated te

95、am of administrators.Distributed by UK financial advisers but also available on a DIY basis,AJ Bell Platinum offers SIPPs and SSASs.AJ Bell MediaAJ Bell Media is an award-winning specialist financial digital publishing company that supports the platform products by providing high quality investment

96、content via a variety of media channels.It also publishes Shares(a weekly digital investment publication),hosts investment conferences and events,and provides stock market data and independent news content to a wide range of corporate and retail customers.InstitutionalAJ Bells Institutional service

97、provides dealing,settlement and custody services to institutional investment businesses.Third party administrationAJ Bells third party administration service provides white label SIPP administration to a number of leading financial services companies.Our non-platform product propositionsTotal number

98、 of retail customers23,3500%Assets under administration8.9 bn5%201620178.9bn8.5bn23,35023,282 20162017AJ Bell InvestmentsAJ Bell Investments provide a range of investment and multi-asset fund management solutions to retail,professional and institutional customers.These include the Managed Portfolio

99、Service and our five risk-rated VT AJ Bell Passive funds.16Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportDigital strategyOur digital strategy continued to gain momentum during 2017,with work focusing on our AJ Bell Inves

100、tcentre product proposition.A new client dashboard was developed,the application process was streamlined and a straight-through cash transfers process was introduced,which has the capability to track cases.We also successfully launched a new BETA site with a re-designed user interface and a new Capi

101、tal Gains Tax(CGT)tool which will help advisers to model different scenarios for their clients.In addition,other refinements were made to our websites,improving navigation and introducing search and filtering tools.Looking ahead we plan to launch a brand new iPad application,a new integrated simplif

102、ied illustration system,better reporting functionality and clients should soon be able to trade directly on their own accounts via the Funds&Shares Services new XO(execution-only)option.We will continue to work during the forthcoming year to replace all legacy screens and functionality to deliver a

103、faster and more efficient client experience.Our strategic aim is to become the easiest platform to use.We plan to achieve this by delivering a rolling programme of changes and initiatives to improve the customer journey and experience.In the digital age,we believe the ability to generate and impleme

104、nt ideas at speed is paramount to achieving success and with this in mind,we created an innovation group earlier this year.The innovation groups sole focus will be on creating new ideas and technologies to ensure our products remain market-leading.Easiest platform to useOur AJ Bell Youinvest product

105、 proposition has also benefited from the development of a simplified application process during the year,which includes the ability to quickly verify photographic identity documents if required using our mobile application.This has significantly improved access for customers wishing to apply for acc

106、ounts via their tablets or mobile phones.Our mobile apps remain an important area of focus and ongoing development in recognition of the number of active daily users more than doubling in the last year.Other developments include the introduction of a brand-new LISA,dividend reinvestment functionalit

107、y and longer opening hours to support US dealing.We have extended our support of voice assistant technologies with the introduction of an application for Google Home.Similar to our support of Alexa,this enables our users to request updates on their investments on supported speakers and an increasing

108、 number of devices such as the FireTV.Investment managementThe VT AJ Bell Passive fund range was launched earlier in the year,following the success of our first investment solution in 2016,the MPS(Managed Portfolio Service).The funds range from cautious to adventurous according to risk appetite.All

109、have the same simple,transparent charging structure and benefit from the same 0.5%OCF cap.This range of five risk-targeted funds uses a long-term,global,multi-asset approach and keeps costs low by focusing on passive investments.Both the MPS and the VT AJ Bell Passive funds have been well received b

110、y the market and we believe that there is growing demand for simple,transparent,low-cost investment solutions.AJ Bell Investments plans to build on this initial success with the appointment of its new Chief Investment Officer,Kevin Doran,who is confident that clear opportunities exist for a new inve

111、stment proposition capable of delivering active returns at passive prices.17Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic report18Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statem

112、entsGovernanceStrategic reportYouve been brilliant.I appreciate your efforts,I appreciate the speed youve dealt with this and I appreciate you taking the time to phone meAJ Bell customerEfficiency gainsFollowing a review of our operating model in 2017 we have decided to centralise our operations at

113、our Manchester Head Office.The migration will complete during 2018 and the Tunbridge Wells office will close by October 2018.As well as helping us to support the planned growth of the business,this reorganisation will also streamline certain processes,to ensure efficiencies are maximised and to enha

114、nce our customer service.Speed of responseTime is always of the essence in our industry,so it is essential that key processes are carried out promptly,and that all our customers queries or requests for action are handled as quickly as possible.First class serviceOver the years we have developed a ma

115、rket-leading reputation for delivering excellent customer service,and our guiding principles ensure customers remain at the heart of everything we do.Our customer service,like our investment platform,is designed to make investing easier.We aim to respond to customers quickly and accurately,and to gi

116、ve them the educational content they need in order to make informed investment decisions.19Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportWe set challenging targets for completing all our key processes and communications

117、to ensure we respond without delay.These targets are monitored on a regular basis and corrective action is taken where we fail to meet them.AccuracyWe have a functional operating structure in place to ensure that queries are directed to the appropriate team and answered swiftly by staff with the req

118、uired expertise and knowledge.All of our customer services staff undertake rigorous training when they join the business,and this is supported by annual refresher courses.We also have an internal Quality Assurance Team,which regularly listens to phone calls and reviews written correspondence to ensu

119、re that our high standards are maintained.Professional Adviser Awards 2017 Best Platform for D2C 2017Boring Money Gold Best Buy 2017City of London Wealth Management Awards Best ISA provider 2017 Best Junior ISA provider 2017Professional Paraplanner Awards 2017 Best Full ISA Provider Your Money Award

120、s 2017 Best Online Direct to Consumer Investment PlatformInvestment contentAJ Bell Youinvest customers with more than 4k in their portfolios automatically receive free access to the weekly online magazine Shares.This provides them with expert analysis and a wealth of market information to help guide

121、 their investment decisions.Advisers are also well catered for,with everything from large-scale investment conferences like Investival,to smaller regional seminars and workshops.In 2017 we also created a Due Diligence Hub,which is full of resources to help advisers tackle the all-important due dilig

122、ence process.RecognitionThe awards we win demonstrate our continued commitment to providing a first-class service.We are proud to have won the following accolades this year:From the very start,the level of understanding and speed of response was outstanding.Your team made it really easy to do busine

123、ss and we will certainly be looking to use AJ Bell againAJ Bell customer I am truly impressed by your efficient and professional service.You have answered my questions straight away and responded very swiftly to my enquiries.Thank you very much.It has been a refreshing pleasureAJ Bell customer20Stra

124、tegic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportPublic relationsOur spokespeople are now well established as go-to experts for the media on pension and investment themes generally,and we have also continued to emphasise some s

125、pecific key issues this year-namely pension scams,pension death benefits,point of sale disclosure and pension tax relief.Our presence in the financial media increased by 44%during 2017,building on the increase we achieved during 2016.Our primary focus has been to increase the mainstream national med

126、ia coverage and we were delighted to accept an invitation for Russ Mould to appear on BBC Breakfast for the first time earlier this year.AJ Bells aim is to become one of the best-known names in its markets.In 2017 we sought to further this aim by increasing both our public relations and sponsorship

127、activities.Brand awarenessNick MatthewCommonwealth Gold Squash Winner21Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportSports sponsorshipOur strategic sponsorship partnerships with sporting teams,events,venues and individu

128、als has once again delivered good exposure to a number of media channels,including national television.AJ Bell London Triathlon2017 saw our third year as sponsors of the AJ Bell London Triathlon,which once again proved to be a huge success.Over 22,000 spectators cheered on 8,000 competitors,104 of w

129、hom raced as part of Team AJ Bell.Highlights included the incredible achievement of Corinne Hutton,who became the first ever quadruple amputee to complete the event.Once again we benefited from enormous branding opportunities around the course,which was covered by Channel 4,All 4 and Sky Sports.AJ B

130、ell Stadium Featuring unmissable AJ Bell rooftop signage,this fantastic sporting venue is a prominent local landmark,seen by thousands of sports fans and a constant stream of motorists on the nearby M60.2017 looks set to be the start of an exciting period for resident team Sale Sharks.AJ Bell Britis

131、h Squash Grand PrixOur sponsorship of the AJ Bell British Squash Grand Prix reached its third consecutive year in 2016,building on what is already a firm association between our brand and a sport that continues to grow in popularity.We are delighted to remain so closely associated with top level squ

132、ash in Manchester,with the event being won by Nick Matthew.Nick has announced that the 2017/18 season will be his last on the PSA World Tour,however we are delighted to continue our support for him as he builds towards the World Championships in Manchester and the Commonwealth Games in Australias Go

133、ld Coast.Our peopleOur success is built on delivering a first class service through the skills and passion of staff who bring our values to life across the business.People strategy and talent managementOur people strategy focuses on staff engagement and talent management.We believe strongly in givin

134、g our staff the ability to progress their career at AJ Bell as our workforce continues to grow and promotion opportunities are created.Our talent management strategy ensures we nurture our staff and give them the correct training,development and support to ensure they can progress with the business.

135、In September 2017 we welcomed our very first group of AJ Bell Apprentices.After receiving an initial tailored training and induction package they will rotate within our Client Services Teams,including the Transfers and Investments Administration teams,over the course of the programme.The training pr

136、ogramme will provide them with the necessary skills to attain the CISI Investment Operations Certificate(IOC)at the end of the course.We recruit the best people with the right skills and behaviours for AJ Bell,ensuring they have a can-do attitude and the drive to succeed as our business grows and fu

137、rther opportunities arise.Our staff engagement framework focuses on the eight measures used within the Best Companies survey;the largest of its kind in the UK.We take part in the survey each year to independently measure our staff engagement and in 2017 we are delighted to record our highest-ever en

138、gagement score,moving closer to a coveted two star accreditation.This is testament to the on-going hard work and commitment of all our staff to work together in an effort to improve the work place.In May 2017 we were delighted to move to our new office headquarters,4 Exchange Quay,which is located i

139、n Salford Quays.It has excellent training and social facilities,including an on-site gym and a rooftop terrace bar.There is significant space to accommodate the future needs of the business as we aim to execute our ambitious growth plans in the coming years.Employee engagementIt is fundamental that

140、our people understand our guiding principles and are engaged in the development and growth of our business.AJ Bells success depends on us having the right people ready at the right time to meet our customers needs.We Our people and corporate social responsibility23Strategic reportGovernanceFinancial

141、 statementsOther informationknow that our people want opportunities to learn,gain new skills and to progress their career.Our staff are provided with ongoing technical training and support,together with crucial personal skills workshops,to ensure they have the appropriate knowledge and skills to per

142、form their roles.We also provide training to keep staff informed of significant changes in regulation,legislation and updates within the company.To engage and develop our people,we continue to invest in new technology,and this year we launched our new learning and performance portal.This is an integ

143、rated,cloud-based solution which enhances the way we manage objective setting,performance reviewing,training,e-learning and the tests which accompany our core training programmes.Diversity and equalityAJ Bell is committed to eliminating discrimination and promoting equality and diversity in its poli

144、cies,procedures and processes.We strive to provide an inclusive workplace where everyone is valued for who they are and what they contribute.Our policies and procedures support a culture that is sensitive to the needs of all employees.We intend to treat everyone equally and with the same attention,c

145、ourtesy and respect,regardless of their age,caring responsibilities,disability,ethnicity,gender,religion,or sexual orientation.We believe in creating a working environment that empowers all individuals,allowing them to flourish in a fast-paced,dynamic organisation.Corporate social responsibilityAt A

146、J Bell we have a strong social conscience.We encourage staff to give something back through charitable and voluntary activities,and we have introduced company initiatives to help raise the profile of local charities.Here is a brief summary of the activities that were undertaken in 2017.Charity fund

147、raisingDuring the year staff across all three offices took part in quiz nights,raising money for various charities including the Alzheimers Society.The Alzheimers Society also benefited from several other staff fundraising initiatives during the year,including a Friday fun day in Tunbridge Wells,a C

148、hristmas Jumper Day in Manchester and bake offs across all three offices.Staff took part in the AJ Bell London Triathlon in August,many of them raising funds for charities in the process.In addition,we also had several staff who completed marathons,10km runs and various other challenges,raising mone

149、y for charities close to their hearts.VolunteeringIn May staff from our Manchester office headed to Trinity House in Rusholme over several lunch times to help out at their weekly Link Good Neighbours lunch club.The charity works to reduce social isolation and loneliness in the over 50s and to suppor

150、t vulnerable adults in the local community.Staff in London enjoyed giving something back in their local community over seven weeks in the summer by helping out at their local Age UK centre in Bermondsey.They also helped to raise funds for the Grenfell Tower fire victims through a cake bake sale.In S

151、eptember staff from our Tunbridge Wells office volunteered through their local Hospice in the Weald charity shop to take part in a Beat the Mountain initiative,where volunteers go to the Hospice warehouse in Sevenoaks to sort through clothes which will then get distributed to shops.AJ Bell Stadium-N

152、orth StandEach year we offer the naming rights for AJ Bell Stadiums North Stand to a charity free of charge.The chosen charity can put its branding on the stand for two years,in order to raise awareness of their work and hopefully gain additional funds over the period of the deal.Following a public

153、vote via social media,the naming rights are currently with Wooden Spoon,which uses the power of rugby to fund life-changing projects for disadvantaged and disabled children across the UK and Ireland.24Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statement

154、sGovernanceStrategic reportThe Board is committed to a continual process of improvement and embedment of the risk management framework within the Group.This ensures that the business identifies both existing and emerging risks,and continues to develop appropriate mitigation strategies.Risk Potential

155、 impactMitigationsRegulatory risk including litigation riskRisk that AJ Bell does not comply with therelevant requirements and standards of the regulatory framework.Potential consumer detriment Enforcement action Tax liabilities LitigationStrong Compliance Policy and Technical teams responsible for

156、ensuring all new rules and regulations,as well as changes to industry practice is captured,interpreted and implemented appropriately.Group Board is supported by a Risk and Compliance Committee and a Risk Management Committee where all regulatory changes are reported and scrutinised.Principal risks a

157、nd uncertaintiesThe directors believe that there are a number of potential risks to the Group that could hinder the successful implementation of their strategy.These risks may arise from internal and external events,acts and omissions.The directors are proactive in identifying,assessing and managing

158、 all risks facing the business,including the likelihood of each risk materialising in the short or longer term.The principal risks and uncertainties facing the Group are detailed below,along with potential impacts and mitigating actions.Industry risksTaxation law change riskRisk of taxation legislat

159、ion or regulatory restriction severely reducing the attractiveness of core products.Loss of competitive advantage Severe financial lossThe directors are not expecting any change in legislation over the coming year that would make the Groups products significantly less attractive.The introduction of

160、Lifetime ISAs in April 2017 is expected to increase the appeal of ISAs and the directors remain optimistic about the prospects for continued growth in saving into tax-advantaged wrappers.Competitor or market riskRisk of products and services becoming out of date or uncompetitive in peer group,increa

161、sed competitor activity,lack of marketing focus and spend to keep pace with competitors.Loss of competitive advantage Severe financial loss Reputational lossThe Group regularly reviews its products against competitors,in relation to pricing,functionality and service,and actively seeks to make enhanc

162、ements where necessary to maintain or improve its competitive position in line with theGroups strategic objectives.The changes to the pricing for the AJ Bell Youinvest and AJ Bell Investcentre products,with effect from October 2016 were implemented successfully,and continues to ensure these products

163、 remain competitive in their target markets and are sustainable,taking into account the changing regulatory and economic environment.Conduct riskRisk that the fair treatment of customers is not central to AJ Bells corporate culture leading to significant customer detriment.Potential for poor consume

164、r outcomes Reputational loss Regulatory risk Severe financial lossThe Group continues to focus on enhancements to its risk management framework,in relation to the identification,monitoring and mitigation of risks of poor customer outcomes,and to its product management process toreduce the potential

165、for customer detriment.All developments are assessed for potential poor consumer outcomes and mitigating actions are delivered alongside the developments as appropriate.25Strategic reportGovernanceFinancial statementsOther informationOther informationFinancial statementsGovernanceStrategic reportRis

166、k Potential impactMitigationsEconomic and capital market fluctuations riskRisk that a significant and prolonged capital market or economic downturn has an adverse effect on consumer confidence.Counterparty credit risk Risk of market/client default on settlement.Risk of concentration of large individ

167、ual exposures or significant exposure with single counterparty.Decreased contribution levels Decreased transactional activity Reduction in asset values Financial loss Unintended market exposure Customer compensation Increased future capital requirementsAlthough the immediate impact of the Brexit vot

168、e was not as dire as many of the predictions,there is considerable uncertainty over the longer term impact on the UK economy and this is likely to remain until,at least,exit terms are agreed.The Groups products are targeted at UK residents and we do not do business in any other countries and have re

169、latively few customers outside the UK.However,in the event that the economy falls back into a prolonged recession,this may impact contribution levels and confidence generally in the savings and investment markets.The directors believe that the Groups overall income levels and in particular the balan

170、ce between the different types of assets and transactions from which that income is derived,provide a robust defensive position against any economic downturn.Capital market fluctuations can have an effect on customer transactional activity and the value of assets under administration.The Group has a

171、 variety of transactional and recurring revenue streams,some of which are monetary amounts while others are ad valorem.This mix of revenue types helps to limit the Groups exposure to capital market fluctuations.There is a risk that unexpected losses may arise as a result of our customers,market coun

172、terparties or banks used by the Group failing to meet their financial obligations.The Group carries out initial and ongoing due diligence on the market counterparties and banks that it uses and regularly monitors the level of exposure.The Group holds an appropriate amount of capital against the mate

173、rialisation of this risk.Technology riskThe reliance on evolving technology remains crucial to the Groups effort to develop its services and enhance products.The risk exists that either theGroups technology fails to operate correctly in some way or that the Group fails to take advantage of any emerg

174、ing technologies.Operational risks Reduced performance of key systems System and website downtime Single point of failure Failure of technology third party servicesIn 2015 the Board approved a revised technology strategy for the Group,covering a period of 3-5 years,and good progress has been made ov

175、er the last two years in the implementation of this strategy.Progress and priorities are reviewed on a regular basis by the Board with a more detailed roadmap agreed for the next 12-18 months.Focus remains on the increasing risk posed by the activities of cyber criminals and the actions required to

176、ensure our controls continue to mitigate this ever-evolving risk and to protect our customers data.In addition,following a review of our IT hosting arrangements a number of changes have been implemented during 2017.The Group continues to invest in its IT infrastructure,to ensure that it is capable o

177、f supporting the planned growth in the business and to protect customers personal data.The Groups business continuity and disaster recovery framework is continually tested and assessed to ensure the Group could continue to provide services to customers in the event of an unforeseen event.26Other inf

178、ormationFinancial statementsGovernanceStrategic reportRisk Potential impactMitigationsThird party reliance risk The Group undertakes its dealing,custody,settlement and administrative activities in-house and is therefore exposed to risk as a consequence of its reliance on third party software supplie

179、rs.Operational processing risk There is a risk that the Groups operational processes are subject to errors or inefficiencies,which would be exacerbated by an unexpected increase in business volumes.Strategic project and project overload risk There is a risk of failing to deliver on a major strategic

180、 project,or trying to complete too many projects or business change initiatives too quickly,leading to a failure to deliver the anticipated benefits.Litigation riskThere is a risk of liability related to litigation from customers or third parties.Business continuity management riskThere is a risk of

181、 disruption to theGroups business in the event of a loss ofaccess to any of the Groups properties or in the event of a catastrophic systemsfailure.Key people risksThe loss of key personnel within theGroup,an increase in staff turnover or aninability to find appropriately qualifiednew or replacement

182、employees,particularly in periods of sustained growth,may have a materially adverse impact on the Groups performance.Loss of third party service Potential market exposure Potential customer detriment Reputational loss Financial loss Loss of earnings Opportunity cost Reputational loss Inability to de

183、liver regulatory projects on time Opportunity cost Disruption to BAU Reputational and financial loss Opportunity cost Reputational loss Financial loss Loss of services Potential customer detriment Financial loss Increased capital requirements Reputational loss Potential customer detriment Financial

184、lossTo mitigate the risk posed by third party software suppliers,the Group maintains a strong partnership relationship with the key suppliers and monitors their performance to ensure their continued commitment to service,financial stability and viability.The Group focuses on increasing the effective

185、ness of its operational procedures and,through its business improvement function,aims to improve and automate more of its processes and,by doing so,reduce the need for manual intervention and the potential for errors.The Group has implemented a process designed to improve the management and delivery

186、 of business improvement initiatives,alongside more significant projects,with members of the Executive Management Board meeting on a regular basis to monitor progress,re-prioritise or approve additional resource,as necessary to ensure delivery of the Groups strategic objectives.The Group has robust

187、systems and controls and maintains an appropriate level of professional indemnity insurance cover against these potential liabilities.The Group has agreements in place with specialist suppliers for geographically remote disaster recovery facilities for all of its operations,including separate offsit

188、e IT recovery facilities.There is a rolling programme of testing of business continuity plans.The Group maintains succession plans for key members of management and has also sought to mitigate this risk by facilitating equity ownership for senior employees through various share schemes and the devel

189、opment of a staff engagement strategy.Financial control environment risk This includes the risk of loss to the business,or its customers,because of either the actions of an unassociated third party or the misconduct of an employee.Reputational loss with customers or regulators Compensation payments

190、Financial loss Increased capital requirementsThe Groups financial control and fraud prevention policies and procedures are designed to ensure that the risk of fraudulent access to customer or corporate accounts is minimised.Fraud training is provided to all members of staff to facilitate early detec

191、tions of potential fraudulent activity.Strong technology controls to identify potential money laundering activity or market abuse.Principal risks and uncertaintiesBy order of the BoardMr Christopher Bruce Robinson(Company Secretary)for and on behalf of AJ Bell Holdings Limited4 Exchange Quay,Salford

192、 Quays,Manchester M5 3EE 12 December 2017GovernanceOther informationFinancial statementsGovernanceStrategic report30Simon TurnerNon-executive Director Simon joined the Board with strong experience in the retail,consumer electronics and IT industries,thanks to his time as Group Managing Director at a

193、 leading UK electrical retailer,and his appointment to the boards of several large internet businesses.No stranger to the financial services industry,he has also enjoyed an eight-year spell on the board at one of Britains biggest building societies,and currently sits on the UK board of a major bank.

194、John TomlinsNon-executive Director John joined AJ Bell with a wealth of experience,having spent his entire full time career working in the IT and financial services sectors.Career highlights include pioneering work on new client investment solutions,and helping to develop a customer proposition that

195、 grew one start-up platforms assets under administration from zero to 40 billion.John also co-founded the Institute of Customer Services,and is presently the Non-executive Chairman of a major technology and software supplier to investment platforms.Les Platts Chairman Les joined AJ Bell in September

196、 2008 having retired as an Audit Partner and practice Senior Partner for the north-east with a leading international professional services firm.Over a period of 33 years,Les gained extensive UK and international experience across all industry sectors,including FTSE 100,FTSE 250,smaller listed PLCs,l

197、arge private companies and private equity investments.He has advised at Board level on a wide range of financial,commercial and governance issues,and is also Vice Chairman of a major Building Society.Michael SummersgillChief Financial&Operating Officer Michael joined AJ Bell in July 2007 and was app

198、ointed to the Board in June 2011 as Chief Financial Officer.In his current role as Chief Financial&Operating Officer he is responsible for all operational functions within the business and for providing financial oversight across the Group.Michael graduated from the University of Sheffield with a de

199、gree in Economics and began his career as an accountant in public practice,gaining experience with a broad portfolio of clients.Andy BellChief Executive Officer Andy co-founded AJ Bell in 1995,having spent a number of years working within the financial services sector.Graduating from Nottingham Univ

200、ersity in 1987 with a first class degree in Mathematics,he qualified as a Fellow of the Institute of Actuaries in 1993 and has built AJ Bell into one of the largest providers of low-cost,online investment platforms and stockbroker services in the UK.Board of DirectorsStrategic reportGovernanceFinanc

201、ial statementsOther information31The EMB is the decision-making body that is responsible for the execution of the strategy agreed with the Board of Directors.It is charged with the day-to-day management of the Group,within the confines of the matters reserved to the Board of Directors.The EMB meets

202、regularly to review the performance of the Group and to agree corrective action where issues arise.The EMB consists of the Chief Executive Officer,the Chief Financial&Operating Officer and the following members of senior management:Louis PetherickChief Risk Officer Louis joined AJ Bell in September

203、2016 as the Group Risk and Compliance Director before taking on the role of Chief Risk Officer in July 2017.Louis has worked for a number of financial services firms over the past 20 years,holding various senior risk,compliance and conduct roles across the insurance,wealth management and banking sec

204、tor.He is responsible for the risk,compliance and financial crime functions within AJ Bell.Fergus LyonsManaging Director,AJ Bell Investcentre Fergus worked at a major bank for over 20 years before joining AJ Bell in August 2000.Since then he has worked in many areas of the business,and is currently

205、Managing Director of AJ Bell Investcentre.Fergus is also responsible for AJ Bell Investments and our Platinum SSAS/SIPP products.Roger StottGroup Finance Director Roger qualified as a Chartered Accountant in 1990 and has worked in retail stockbroking since 1999.He spent seven years as Finance Direct

206、or at a well-known stockbroker,joining the company at start-up and seeing it through an MBO and sale.With AJ Bell since 2008,Roger is responsible for overseeing the finance department,the treasury function,the commercial management of supplier relationships and our third party products.Charles Galbr

207、aithManaging Director,AJ Bell Youinvest Charles joined AJ Bell Securities in 2006 as Managing Director.He has worked in a number of stockbroking firms over the past 20 years,concentrating on both private and institutional clients.Previously he was Managing Director of a well-known stockbroker,and wa

208、s also responsible for the stocks and shares ISA business of a major high street bank.Charles has overall responsibility for our institutional stockbroking business,AJ Bell Youinvest platform and media business.Christopher Bruce RobinsonGroup Legal Services Director and Company Secretary Bruce joine

209、d AJ Bell in October 2012,having previously acted as one of the companys external legal advisers.Before joining AJ Bell,Bruce spent 20 years in private practice as a corporate and commercial lawyer.Executive Management BoardOther informationFinancial statementsGovernanceStrategic report32Directors r

210、eportThe directors present their annual report on the affairs of the Group,together with the consolidated financial statements and auditors report,for the year ended 30 September 2017.Principal activityThe principal activity of the Group is to provide investment administration,dealing and custody se

211、rvices.Business reviewA review of the Groups activities over the financial year is described in the Chairmans statement on pages 5 to 6 and the Chief Executive Officers report on pages 7 to 9.DirectorsThe directors,who served throughout the year,are disclosed on page 30.Directors interestsThe direct

212、ors who held office at 30 September 2017 had the following interests in the share capital of the Company:OrdinaryA non-votingB non-votingC non-votingD non-votingX non-voting30 Sept 201730 Sept 201730 Sept 201730 Sept 201730 Sept 201730 Sept 2017Les Platts50,305-Andy Bell11,459,783104,09344,45138,948

213、50,118-Michael Summersgill-20,00013,28114,51734,71466,330John Tomlins31,578-Simon Turner25,800-Total11,567,466124,09357,73253,46584,83266,330 No director held the Ordinary non-voting class of shares at 30 September 2017,30 September 2016 or at any time during the period between these dates.Directors

214、 share optionsAt 30 September 2017,the directors who held office held the following share options:DirectorNumberExercise price Date of grant of optionEarliest date of exerciseM Summersgill10,0001.901 Aug 091 Jul 18M Summersgill2,5003.001 Oct 101 Jul 18M Summersgill1,0003.5019 Dec 111 Jul 18There are

215、 no performance criteria attached to any of the three tranches of share options.No options were exercised by the directors during the year,or during the previous year.For the year ended 30 September 2017Strategic reportGovernanceFinancial statementsOther information33FCA Remuneration CodeThe Group i

216、s subject to CRD IV requirements and therefore the FCA Remuneration Code.The Group maintains remuneration policies and practices in accordance with the applicable principles of the Remuneration Code,which are overseen by the Remuneration Committee,comprised of the Non-executive Directors of the Boar

217、d.Material decisions in relation to the remuneration of staff whose actions have a material impact on the risk profile of the firm and in relation to individuals in control functions are overseen by the Remuneration Committee.The Groups remuneration policies provide for variable remuneration to be l

218、inked to performance.Key performance indicatorsKey performance indicators in relation to the Groups activities are reviewed continually by senior management and presented on the highlights page,given at page 4.DividendsThe Company has declared a final dividend of 15.50p(2016:13.00p)per share,to be p

219、aid on 15 December 2017.This,together with the interim dividend of 12.75p(2016:12.75p)paid on 22 May 2017,makes a total dividend in respect of the financial year ended 30 September 2017 of 28.25p per share(2016:25.75p).Capital managementThe Group is subject to CRD IV requirements and therefore has a

220、 consolidated regulatory capital requirement.The capital held to meet this requirement comprises share capital,share premium and retained earnings.The directors ensure that the level of capital held in the Group:meets the regulatory capital requirements;provides a strong base for ongoing trading act

221、ivities;and is sufficient to support the Groups long-term strategy.The Groups regulatory capital requirement and details can be found under our CRR Part Eight(Pillar 3)disclosures;this can be found on the Groups website at www.ajbell.co.uk.The Group continue to hold a significant amount of capital a

222、bove its regulatory capital requirement.Country by Country ReportingAJ Bell Securities Limited and AJ Bell Investments LLP are regulated under CRD IV and CRR.Regulation requires disclosure of certain financial information on a country by country basis.The following table demonstrates how we comply w

223、ith the country by country reporting requirements of CRD IV,by showing where the relevant information can be found within the financial statements.The Company has taken the exemption permitted under CRD IV to provide this information on a consolidated basis.JurisdictionNumber of employeesTurnoverPro

224、fit(or loss)before taxCash tax paid on profit or loss(000)Public subsidies receivedUKSee note 7See income statementSee income statementSeestatement ofcash flowsNone receivedDirectors reportFor the year ended 30 September 2017Other informationFinancial statementsGovernanceStrategic report34Directors

225、reportFinancial risksInterest rate riskLiquidity riskCredit and bank default riskRisk of market,commercial or regulatory pressures on interest rate marginsThis is the risk that the Group may be unable to meet its liabilities as and when they fall due.These liabilities arise from the day-to-day activ

226、ities of the Group and from its obligations to customers.Reduction in revenue Loss of reputation Potential customer detriment Financial loss Financial lossThe Group has a variety of transactional and recurring revenue streams,some of which are monetary amounts while others are ad valorem.This mix of

227、 revenue types helps to limit the Groups exposure to interest rate fluctuations.In addition,the Group does not have any external borrowings.The Group is a highly cash generative business and maintains sufficient cash and standby banking facilities to fund its foreseeable trading requirements.The Gro

228、ups credit risk extends to its principal financial assets.These are cash balances held within banks and trade and other receivables.The directors continually monitor the strength of the banks used by the Group.The banks currently used by the Group are detailed in note 16.With regards to trade receiv

229、ables,the Group has implemented procedures that require appropriate credit or alternative checks on potential customers before business is undertaken.This minimised credit risk in this area.The Groups credit risk extends to its principle financial assets.These are cash balances held with banks and t

230、rade and other receivables.Political contributions There were no political contributions in the current year or prior year.Charitable donationsDuring the year,the Group made charitable donations of 109,125(2016:85,279).Disabled employeesApplications for employment by disabled persons are considered

231、bearing in mind the aptitude of the applicant concerned.In the event of employees becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate facilities and training are arranged.It is the policy of the Group that the training,career developme

232、nt and promotion of disabled persons must,as far as possible,be identical to that of other employees.For the year ended 30 September 2017Strategic reportGovernanceFinancial statementsOther information35Employee consultationThe Group places considerable value on the involvement of its employees.It ha

233、s continued to keep them informed on matters affecting them as employees and arising from the various factors affecting the performance of the Group.This is achieved through formal and informal meetings and internal publications.Employee representatives are consulted regularly on a wide range of mat

234、ters affecting their current and future interests.Employee share schemes have operated since June 2005.These schemes have promoted wider employee involvement in the Group.The directors believe that the incentivisation of senior management and key employees by equity participation is an important fac

235、tor in the continuing success of the Group.This policy aligns the interests of management with those of the wider shareholder base.Internal controlThe Board has overall responsibility for the maintenance of the internal control system established by the Group and places considerable reliance on a st

236、rong control environment.However,such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives.It can only provide reasonable and not absolute assurance against material misstatement or loss.Compliance with internal control procedures is monitored by th

237、e directors through the Risk and Compliance Committee and the Audit Committee,which are responsible for overseeing the Groups Risk Management,Compliance and Internal Audit functions.Going concernThe consolidated financial statements have been prepared on a going concern basis.After making enquiries,

238、the directors believe that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.The going concern basis of preparation is discussed in note 2.1 of the consolidated financial statements.Events after the date of the co

239、nsolidated statement of financial positionDetails of events occurring after the end of the reporting period are given in note 26.Disclosure of information to auditorEach of the persons who are a director at the date of approval of this annual report confirms that:so far as the director is aware,ther

240、e is no relevant audit information of which the Companys auditor is unaware;and the director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Companys auditor is aware of that information.Audi

241、torPursuant to Section 487 of the Companies Act 2006,the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office.Approved by the Board on 12 December 2017 and signed on its behalf by:Mr Christopher Bruce Robinson(Company Secretary)for and on behalf of AJ Bell Holdings

242、 Limited4 Exchange Quay,Salford Quays,Manchester M5 3EE12 December 2017Directors reportFor the year ended 30 September 2017Other informationFinancial statementsGovernanceStrategic report36Statement of directors responsibilities in respect of the Strategic report,Directors report and the financial st

243、atementsThe directors are responsible for preparing the Annual Report and the Group and parent company financial statements in accordance with applicable law and regulations.Company law requires the directors to prepare Group and parent company financial statements for each financial year.Under that

244、 law they have elected to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union(IFRSs as adopted by the EU)and applicable law and have elected to prepare the parent company financial statements in accordance with UK acc

245、ounting standards and applicable law(UK Generally Accepted Accounting Practice),including FRS 101(Financial Reporting Standard 101)Reduced Disclosure Framework.Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of t

246、he state of affairs of the Group and parent company and of their profit or loss for that period.In preparing each of the Group and parent company financial statements,the directors are required to:select suitable accounting policies and then apply them consistently;make judgements and estimates that

247、 are reasonable,relevant,reliable and prudent;for the Group financial statements,state whether they have been prepared in accordance with IFRSs as adopted by the EU;for the parent company financial statements,state whether applicable UK accounting standards have been followed,subject to any material

248、 departures disclosed and explained in the financial statements;assess the Group and parent companys ability to continue as a going concern,disclosing,as applicable,matters related to going concern;and use the going concern basis of accounting unless they either intend to liquidate the Group or the

249、parent company or to cease operations,or have no realistic alternative but to do so.The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent companys transactions and disclose with reasonable accuracy at any time the financial position

250、of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006.They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fra

251、ud or error,and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.The directors are responsible for the maintenance and integrity of the corporate and financial information in

252、cluded on the companys website.Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.Strategic reportGovernanceFinancial statementsOther information37Independent auditors report to the members of AJ Bell Holdings

253、LimitedOpinionWe have audited the financial statements of AJ Bell Holdings Limited(“the Company”)for the year ended 30 September 2017,set out on pages 40-83,which comprise the consolidated income statement,consolidated and company statement of financial position,consolidated and company statement of

254、 changes in equity,consolidated statement of cash flows and related notes,including the accounting policies on pages 44-51 and page 80.In our opinion:the financial statements give a true and fair view of the state of the Groups and of the parent companys affairs as at 30 September 2017 and of the Gr

255、oups profit for the year then ended;the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union;the parent company financial statements have been properly prepared in accordance with UK accounting standard

256、s,including FRS 101 Reduced Disclosure Framework;the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.Basis of opinion We conducted our audit in accordance with International Standards on Auditing(UK)(“ISAs(UK)”)and applicable law.Our responsibili

257、ties are described below.We have fulfilled our ethical responsibilities under,and are independent of the group in accordance with,UK ethical requirements including the FRC Ethical Standard.We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.Going

258、 concernWe are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least twelve months from the date of appr

259、oval of the financial statements.We have nothing to report in these respects.Strategic report and directors reportThe directors are responsible for the strategic report and the directors report.Our opinion on the financial statements does not cover those reports and we do not express an audit opinio

260、n thereon.Our responsibility is to read the strategic report and the directors report and,in doing so,consider whether,based on our financial statements audit work,the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge.Based solely on tha

261、t work:we have not identified material misstatements in the strategic report and the directors report;in our opinion the information given in those reports for the financial year is consistent with the financial statements;and in our opinion those reports have been prepared in accordance with the Co

262、mpanies Act 2006.Matters on which we are required to report by exceptionUnder the Companies Act 2006,we are required to report to you if,in our opinion:adequate accounting records have not been kept by the parent company,or returns adequate for our audit have not been received from branches not visi

263、ted by us;or the parent company financial statements are not in agreement with the accounting records and returns;or certain disclosures of directors remuneration specified by law are not made;or we have not received all the information and explanations we require for our audit.We have nothing to re

264、port in these respects.Directors responsibilities As explained more fully in their statement set out on page 36,the directors are responsible for:the preparation of the financial statements and for being satisfied that they give a true and fair view;such internal control as they determine is necessa

265、ry to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error;assessing the Group and parent companys ability to continue as a going concern,disclosing,as applicable,matters related to going concern;and using the going concern basis of ac

266、counting unless they either intend to liquidate the Group or the parent company or to cease operations,or have no realistic alternative but to do so.Auditors responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material mi

267、sstatement,whether due to fraud or error,and to issue our opinion in an auditors report.Reasonable assurance is a high level of assurance,but does not guarantee that an audit conducted in accordance with ISAs(UK)will always detect a material misstatement when it exists.Misstatements can arise from f

268、raud or error and are considered material if,individually or in aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.Other informationFinancial statementsGovernanceStrategic report38A fuller description of our respons

269、ibilities is provided on the FRCs website at www.frc.org.uk/auditorsresponsibilities.The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the companys members,as a body,in accordance with Chapter 3 of Part 16 of the Companies Act 2006.Our audit work has

270、 been undertaken so that we might state to the companys members those matters we are required to state to them in an auditors report and for no other purpose.To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the company and the companys members,as

271、a body,for our audit work,for this report,or for the opinions we have formed.Alexander Simpson(Senior Statutory Auditor)for and on behalf of KPMG LLP,Statutory Auditor Chartered Accountants 1 St Peters SquareManchesterM2 3AE12 December 2017Independent auditors report to the members of AJ Bell Holdin

272、gs LimitedFinancial statements40Other informationFinancial statementsGovernanceStrategic reportFor the year ended 30 September 2017Notes2017 0002016 000Revenue575,57664,466Administrative expenses(53,800)(47,717)Operating profit621,77616,749Investment income373Finance costs8(82)(43)Profit before tax2

273、1,69716,779Taxation9(4,223)(3,466)Profit for the year17,47413,313Profit/(loss)for the financial year attributable to:Equity holders of the parent company17,57113,440Non-controlling interests(97)(127)17,47413,313Earnings per ordinary share:Basic(pence)1142.8532.85Diluted(pence)1142.6032.73All income,

274、profit and earnings are in respect of continuing operations.There were no other components of recognised income or expense in either year and consequently no statement of other comprehensive income has been presented.The notes on pages 44 to 74 form an integral part of these financial statements.Con

275、solidated income statement41Strategic reportGovernanceFinancial statementsOther informationAs at 30 September 2017Consolidated statement of financial position(as restated)(as restated)Notes201700020160002015000AssetsNon-current assets:Goodwill123,6603,6601,957Other intangible assets133,8415,0166,796

276、Property,plant and equipment143,9941,2681,204Deferred tax asset17227495411,7229,99310,011Current assets:Trade and other receivables1622,17217,73815,913Cash and cash equivalents1642,13839,51036,31864,31057,24852,231Total assets76,03267,24162,242LiabilitiesCurrent liabilities:Trade and other payables1

277、8(10,115)(9,554)(7,370)Current tax liabilities(1,857)(1,701)(1,843)Obligations under finance leases19(75)(75)(106)Provisions21(1,587)(363)(53)(13,634)(11,693)(9,372)Non-current liabilities:Obligations under finance leases19(68)(34)(109)Provisions21(790)(754)(398)Other payables20(178)(972)(90)(1,036)

278、(1,760)(597)Total liabilities(14,670)(13,453)(9,969)Net assets61,36253,78852,273EquityShare capital22404040Share premium2,8062,2291,913Retained earnings58,51651,91850,320Equity attributable to owners of the company61,36254,18752,273Non-controlling interests-(399)-Total equity61,36253,78852,273The no

279、tes on pages 44 to 74 form an integral part of these financial statements.Approved by the Board on 12 December 2017 and signed on its behalf by:Mr Michael Summersgill(Director)for and on behalf of AJ Bell Holdings Limited4 Exchange Quay,Salford Quays,Manchester M5 3EE12 December 201742Other informat

280、ionFinancial statementsGovernanceStrategic reportSharecapital 000Share premium 000Retained earnings 000Non-controlling interests 000Total equity 000Balance at 1 October 2016402,22951,918(399)53,788Total comprehensive income for the year:Profit/(loss)for the financial year-17,571(97)17,474Transaction

281、s with owners,recorded directly in equity:Issue of share capital-577-577Dividends-(10,564)-(10,564)Equity settled share-based payment transactions-107-107Purchase of own share capital-(165)-(165)Deferred tax effect of share-based payments-88-88Tax relief on exercise of share options-57-57Purchase of

282、 non-controlling interest-(360)360-Total contributions by and distributions to owners-(136)136-Balance at 30 September 2017402,80658,516-61,362Balance at 1 October 2015401,91350,320-52,273Total comprehensive income for the year:Profit/(loss)for the financial year-13,440(127)13,313Transactions with o

283、wners,recorded directly in equity:Issue of share capital-316-316Dividends-(11,763)-(11,763)Equity settled share-based payment transactions-69-69Purchase of non-controlling interest-(484)(484)Total contributions by and distributions to owners-(212)212-Deferred tax effect of share-based payments-(8)-(

284、8)Tax relief on exercise of share options-72-72Balance at 30 September 2016402,22951,918(399)53,788The notes on pages 44 to 74 form an integral part of these financial statements.For the year ended 30 September 2017Consolidated statement of changes in equity43Strategic reportGovernanceFinancial stat

285、ementsOther informationFor the year ended 30 September 2017Consolidated statement of cash flows(as restated)Notes20170002016000Cash flows from operating activitiesProfit for the financial year17,47413,313Adjustments to cash flows from non-cash items:Investment income(3)(73)Finance costs8243Income ta

286、x expense4,2233,466Depreciation and amortisation2,0572,086Impairment of intangible assets-345Share-based payment expense10769Net increase in provisions and other payables466666Loss on disposal of property,plant and equipment484Operating cash flows before movement in working capital24,45419,919Increa

287、se in trade and other receivables(4,434)(1,607)Increase in trade and other payables561819Cash generated from operations20,58119,131Income tax paid(4,100)(3,498)Interest paid(82)(43)Net cash flow from operating activities16,39915,590Cash flows from investing activitiesPurchase of other intangible ass

288、ets13(44)(115)Purchase of property,plant and equipment14(3,476)(604)Interest received373Net cash paid to acquire subsidiary-(199)Net cash flows from investing activities(3,517)(845)Cash flows from financing activitiesPayments of obligations under finance leases(102)(106)Proceeds from issue of share

289、capital556316Proceeds from settlement of part-paid shares21-Payments for purchase of own shares(165)-Dividends paid10(10,564)(11,763)Net cash flows from financing activities(10,254)(11,553)Net increase in cash and cash equivalents2,6283,192Cash and cash equivalents at beginning of year39,51036,318To

290、tal cash and cash equivalents at end of year42,13839,510The notes and information on pages 44 to 74 form an integral part of the consolidated financial statements.44Other informationFinancial statementsGovernanceStrategic reportFor the year ended 30 September 2017Notes to the consolidated financial

291、statements1.General informationAJ Bell Holdings Limited(“the Company”)and its subsidiaries(together the“Group”)provide investment administration,dealing and custody services.The nature of the Groups operations and its principal activities are set out in the Strategic report and the Directors report.

292、The Company is a private limited company limited by shares and incorporated in the United Kingdom.The Companys number is 04503206 and the registered office is 4 Exchange Quay,Salford Quays,Manchester M5 3EE.A list of investments in subsidiaries,including the name,country of incorporation,registered

293、office,and proportion of ownership is given in note 4 of the Companys separate financial statements.The consolidated financial statements for the Company and its subsidiaries were approved by the Board on 12 December 2017.2.Significant accounting policiesBasis of accounting The consolidated financia

294、l statements of AJ Bell Holdings Limited have been prepared in accordance with International Financial Reporting Standards(IFRS)as adopted by the European Union(EU),IFRIC interpretations and those parts of the Companies Act 2006 applicable to Companies reporting under IFRS.The financial statements a

295、re prepared on the historical cost basis and prepared on a going concern basis as noted on page 45.They are presented in sterling,which is the functional and presentational currency of the Group,rounded to the nearest thousand.The directors have elected to prepare the parent companys financial state

296、ments in accordance with the provisions of the Large and Medium-Sized Companies and Groups(Accounts and Reports)Regulation 2008 and have prepared them in accordance with FRS101.This UK GAAP standard allows the use of EU-adopted International Financial Reporting Standards(IFRS)with reduced disclosure

297、s,where allowed,by the Companies Act and associated legislation.As permitted by Section 408 of the Companies Act 2006,no profit and loss account is presented for the Company;the notes and information for the Company are presented on pages 78 to 83.The accounting policies have been applied consistent

298、ly to all periods presented in these financial statements and by all Group entities,other than for those discussed in note 3,which have changed revenue,financial assets and financial liabilities.45Strategic reportGovernanceFinancial statementsOther informationFor the year ended 30 September 2017Note

299、s to the consolidated financial statementsChanges to International Reporting StandardsInterpretations and standards which became effective during the year:The following accounting standards and interpretations that are relevant to the Group became effective during the year:Effective fromIAS 1Disclos

300、ure Initiative1 Jan 2016IAS 16 and 38Clarification of Acceptable Methods of Depreciation and Amortisation1 Jan 2016Annual Improvements 2012-2014 Cycle Interpretations and standards which have been issued and are not yet effective:At the date of authorisation of these financial statements the followi

301、ng standards and interpretations have been issued but are not yet effective and have not been applied in preparing the financial statements.Effective fromIAS 7Disclosure Initiative1 Jan 2017IAS 12Recognition of Deferred Tax Assets for Unrealised Losses(Amendments)1 Jan 2017IFRS 9Financial Instrument

302、s1 Jan 2018IFRS 2Classification and Measurement of Share Based Payment Transactions(Amendment)1 Jan 2018IFRS 15Revenue from Contracts with Customers1 Jan 2018IFRS 16Leases1 Jan 2019The directors anticipate that the adoption of these standards and interpretations in future periods will not have a mat

303、erial impact on the financial statements when they come into effect other than IFRS 16 Leases.The directors are currently reviewing the impact of adopting this standard on the financial statements of the Group in future periods.Basis of consolidationThe consolidated financial statements incorporate

304、the financial statements of the Company and entities controlled by the Company(its subsidiaries)made up to 30 September each year.The Group controls a subsidiary when it has power over an investee,is exposed,or has rights to variable returns from its involvement with the subsidiary and has the abili

305、ty to affect those returns through its power over the investee.The Group reassesses whether it controls an investee if facts and circumstances indicate there are changes to one or more elements of control.The results of a subsidiary undertaking are included in the consolidated financial statements f

306、rom the date the control commences until the date that control ceases.All intercompany transactions,balances,income and expenses are eliminated on consolidation.2.1 Going concernThe Groups business activities,together with its financial position and the factors likely to affect its future developmen

307、t and performance are set out in the Strategic report on pages 4 to 26 and the Directors report on pages 32 to 35.Within the Directors report,the financial risks section on page 34 includes the Groups policies and processes for managing exposure to credit and liquidity risk.The Groups forecasts and

308、objectives,taking into account a number of potential changes in trading performance,show that the Group should be able to operate at adequate levels of both liquidity and capital for the foreseeable future.The directors have performed a number of stress tests on capital and liquidity and these provi

309、de assurance that the Group has sufficient capital to operate under stressed conditions.Consequently,after making reasonable enquiries,the directors are satisfied that the Group has sufficient resources to continue in business for the foreseeable future and therefore have continued to adopt the goin

310、g concern basis in preparing the financial statements.46Other informationFinancial statementsGovernanceStrategic report2.2 Business combinationsThe acquisition of subsidiaries is accounted for using the acquisition method.The cost of acquisition is measured as the aggregate of the fair values(at the

311、 date of exchange)of assets given,liabilities incurred or assumed,and equity instruments issued by the Group in exchange for control of the acquiree.Acquisition-related costs are recognised in profit or loss as incurred.The acquirees identifiable tangible and intangible assets,liabilities and contin

312、gent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.2.3 GoodwillGoodwill arising on consolidation represents the excess of the cost of acquisition over the Groups interest in the fair value of the identifiable assets and l

313、iabilities of the subsidiary,associate or jointly-controlled entity at the date of acquisition.Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.Goodwill that is recognised as an asset is reviewed for impairment at least

314、annually.Any impairment is recognised immediately and is not subsequently reversed.For the purpose of impairment testing,goodwill is allocated to one or more of the Groups CGUs(Cash Generating Units)expecting to benefit from the synergies of the combination.CGUs to which goodwill has been allocated

315、are reviewed annually or more frequently when there is an indication that the goodwill relating to that CGU may have been impaired.If the recoverable amount from the CGU is less than the carrying amount of the assets present on the consolidated statement of financial position forming that CGU,the im

316、pairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the assets forming that CGU and then to the assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.On disposal of a subsidiary,associate or jointly-controlled entity,the attri

317、butable amount of goodwill is included in the determination of the profit or loss on disposal.2.4 Revenue recognition In recognising revenue,the directors follow the principles contained in IAS 18 Revenue to determine appropriate revenue recognition policies.Revenue is recognised to the extent that

318、it is probable that the economic benefits associated with the transaction will flow into the Group.Revenue is measured at the fair value of the consideration received or receivable net of discounts,VAT and other sales-related taxes,for goods sold and services provided in the year.Administration and

319、custodian fees are recognised in the period in which the service is rendered using the percentage completion method.The extent to which a service is complete is determined by the different work activity profiles of the associated individual services.Services rendered at the inception of a fixed-term

320、 contract are recognised over the life of that contract.Asset-based commissions are accrued on a time basis by reference either to the principal and effective interest rate or the due date for payment.Transaction-based commissions are recognised when received in accordance with the date of settlemen

321、t of the underlying transaction.Investment revenue comprises interest income receivable on cash balances held within the Group.Interest income is recognised in the income statement as it accrues,using the effective interest rate method.For the year ended 30 September 2017Notes to the consolidated fi

322、nancial statements47Strategic reportGovernanceFinancial statementsOther informationFor the year ended 30 September 2017Notes to the consolidated financial statements2.5 LeasingLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of

323、ownership to the lessee.All other leases are classified as operating leases.Assets held under finance leases are recognised as assets of the Group at their fair value or,if lower,at the present value of the minimum lease payments,each determined at the inception of the lease.The corresponding liabil

324、ity to the lessor is included in the consolidated statement of financial position as a finance lease obligation.Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.Rental p

325、ayments under operating leases are charged to the income statement on a straight-line basis over the term of the relevant lease.Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.2.6 Investment incomeInvestme

326、nt income comprises interest received on bank deposits.Investment income is recognised in profit or loss as it accrues,using the effective interest rate.2.7 Finance costsFinance costs comprise interest payable and finance charges on finance leases.Finance costs are recognised in the income statement

327、 using the effective interest rate method.2.8 Retirement benefit costsThe Group makes payments into the personal pension schemes of certain employees as part of their overall remuneration package.Contributions are recognised in the income statement as they are payable.The Group also contributes to e

328、mployees stakeholder pension schemes.The assets of the scheme are held separately from those of the Group in independently administered funds.Any amount charged to the income statement represents the contribution payable to the scheme in respect of the period to which it relates.Alternatively,the Gr

329、oup will pay contributions to an employees AJ Bell Youinvest SIPP,if they wish,instead of the stakeholder pension.2.9 TaxationThe tax expense represents the sum of the current tax payable and deferred tax.Tax is recognised in the income statement except to the extent that it relates to items recogni

330、sed directly in equity,in which case it is recognised in equity.Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years,using tax rates enacted or substantively enacted at the report

331、ing date.Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.Deferred tax liabilities are generally recognised on all taxable temporary differences and deferred tax assets

332、 are recognised to the extent that it is probable that taxable profits will be available in the future,against which deductible temporary differences can be utilised.Such assets and liabilities are not recognised if the temporary difference arises(other than in a business combination)from:The initia

333、l recognition of goodwill;or Investment in subsidiaries to the extent that they will probably not reverse in the foreseeable future;or The initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets