Wrap Text
Annual Report and Accounts 2018 and Notice of Annual General Meeting 2019
QUILTER PLC
(previously, Old Mutual Wealth Management Limited)
Incorporated under the Companies Act 1985 with registered number
06404270 and re-registered as a public limited company under the
Companies Act 2006)
ISIN CODE: GB00BDCXV269
JSE SHARE CODE: QLT
Quilter plc (the "Company")
28 March 2019
Quilter plc
Annual Report and Accounts 2018 and Notice of Annual General Meeting 2019
Quilter plc (the “Company”) announces that copies of the following documents have been submitted to the
National Storage Mechanism and will shortly be available for inspection at
http://www.morningstar.co.uk/uk/NSM:
1. Annual Report and Accounts 2018 (the “2018 Annual Report”);
2. Notice of Annual General Meeting 2019 (the “Notice of AGM”); and
3. Forms of Proxy for the Annual General Meeting 2019.
These documents will be posted to shareholders on Thursday, 11 April 2019. The 2018 Annual Report and the
Notice of AGM are also available to view online at quilter.com/annualreport.
The Company’s Annual General Meeting 2019 (the “2019 AGM”) will be held on Thursday, 16 May 2019 at
11:00am (UK time) in the Presentation Suite, Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ. The
table below shows the key dates for shareholders in respect of the 2019 AGM.
Posting Posting Last day to Proxy Record Date of
1
record date trade date for date to 2019 AGM
date registered attend and
holders vote
Holdings on Friday, 29 Thursday, 11 - Tuesday, 14 Tuesday, 14 Thursday, 16
the London March April 2019 May 2019 at May 2019 at May 2019 at
Stock 2019 11:00am (UK 6:30pm (UK 11:00am (UK
Exchange time) time) time)
Holdings on Friday, 29 Thursday, 11 Thursday, 9 Tuesday, 14 Tuesday, 14 Thursday, 16
the March April 2019 May 2019 May 2019 at May 2019 at May 2019 at
Johannesburg 2019 12:00pm (SA 7:30pm (SA 12:00pm (SA
Stock time) time) time)
Exchange
1
Last Day to Trade is applicable only to holders on the Johannesburg Stock Exchange. Holders can trade their shares up to 5:00pm (SA
time) on this date and thereafter the register is closed for the purposes of determining which holders are entitled to vote in respect of
the 2019 AGM.
Pursuant to Listing Rule 12.4.4, in addition to renewing the Company’s existing authority to make market
purchases of its own shares, the Company announces that it intends to propose resolutions at the 2019 AGM
seeking authorisation to:
a) enter into a contingent purchase contract with J.P. Morgan Equities South Africa Proprietary Limited.
The commercial purpose of this authority is to enable the Company to purchase up to a maximum of
190,225,109 ordinary shares of the Company which are currently listed on the Johannesburg Stock
Exchange (such maximum to be reduced by any purchases made pursuant to any general authority of
the Company to make market purchases of its own shares); and
b) undertake an odd-lot offer, which will entail the Company making an offer to certain holders of fewer
than 100 ordinary shares of the Company to repurchase their shares.
Full details in respect of such proposed resolutions are set out in the Notice of AGM.
Additional information
The following information is extracted from the 2018 Annual Report (page references are to pages in the 2018
Annual Report) and should be read in conjunction with the Quilter plc 2018 Final Results announcements
issued on 12 March 2019. Both documents can be found at quilter.com/investor-relations and together
constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through
a Regulatory Information Service. This material is not a substitute for reading the 2018 Annual Report in full.
Principal risks and uncertainties
The principal risks and uncertainties that could impact the Group are summarised below. As a UK-based
financial services firm, the implications and economic impact of several scenarios of the UK leaving the EU in
relation to financial services will influence the degree to which these risks act upon Quilter, particularly with
regards to strategy, market, legal and regulatory, and third party risks, including potential disruption to
Quilter’s business operations and supply chain. In addition, recent quarters have seen reduced levels of
investor confidence and this could deteriorate further, potentially materially further, under various scenarios
related to the UK leaving the EU. A Group-wide Brexit programme is in place to actively monitor these risks
and a number of actions are already in place to mitigate any implications to our business and customers
including for example, establishing a regulated asset management company in Ireland.
Strategic risks
The risk that the strategy is unsound due to poor decision making, incorrect information or assumptions,
or that the activities supporting the delivery of the strategy are inadequate or poorly designed.
Strategy Key management actions
If Quilter’s strategy does not yield the anticipated • Strategic and business planning process
benefits, for example, through inaccurate • Monitoring of key performance indicators
prediction of the type of products and the level of • Robust strategic initiative programme
advice required by its target customer base or management
inability to price such products and services • Risk oversight and assurance activity
competitively, this may have a material adverse • Clear accountabilities
effect on the Group’s business, financial condition,
results of operations and prospects, and
reputation.
Reputation and brand Key management actions
Quilter is dependent on the strength of its • Employee engagement on responsible
reputation and its brands, which are vulnerable to business, responsible investment and business
adverse market perception or negative publicity, code of conduct compliance
and the Company may face challenges with regard • Understanding potential impacts on reputation
to its ongoing rebranding initiative. through our risk framework and policies
• Brand use policy and standards
• Crisis management plans and procedures
Competitive pressure Key management actions
Quilter’s business is conducted in a competitive • Differentiated service and product offerings
environment and, if Quilter is not successful in • Competitor activity monitoring
anticipating and responding to competitive change, • Disruptive technologies and non-traditional
adviser or customer preferences or demographic competition monitoring
trends in a timely and cost effective manner, its
business, financial condition, results of operations
and prospects could be materially adversely
affected.
People and culture Key management actions
Quilter may fail to attract and retain talented • Risk adjusted remuneration
advisers, investment managers, portfolio managers, • Performance appraisals and monitoring
senior management and other key employees. This • Culture and employee engagement surveys
would present a risk to the delivery of Quilter’s • Employee wellbeing initiatives
overall strategy, in particular during this period of • Compliance with the code of conduct and
significant change across the Group. Additionally human resources policies and standards
this could have a material adverse effect on
Quilter’s business, financial and operational
performance, prospects, and reputation.
Market risks
The risk of an adverse change in the level or volatility of market prices of assets, liabilities or financial
instruments resulting in loss of earnings or reduced solvency.
Market risks Key management actions
Quilter’s results may be materially adversely • Financial risk limits
affected by conditions in global capital markets, the • Stress and scenario analysis and stress testing
global economy generally and the UK economy in • Economic environment monitoring
particular that result in a decrease in the value of • Financial risk policies and standards
customer investment portfolios. • Maintain strong balance sheet
The volatility and strength of debt and equity
markets, the direction and pace of change of
interest rates and inflation all affect the economic
environment, investor confidence, our reputation
and, ultimately, the volume and profitability of
Quilter’s business.
Business risks
The risk that business initiatives supporting the delivery of the strategy are not implemented correctly or
in full, or that the business performance fails to meet expectations across one or more key deliverables,
resulting in an adverse impact to the achievement of the Group’s business plan objectives.
Conduct risk Key management actions
Conduct risk is the risk that decisions and • Business code of conduct and mandatory
behaviours made by Quilter, its employees, its training
advisers and appointed representatives lead to • Defined and measured customer outcomes
customers being treated unfairly or otherwise • Customer outcomes governance
result in detrimental customer outcomes and • Quilter policy suite compliance including
damage to our reputation. Conduct risk may arise responsible business conduct, financial crime
where Quilter fails to design, implement or adhere and customer policies
to appropriate policies and procedures, offer
products, services or other propositions that do not
meet the needs of customers or fails to perform in
accordance with its intended design, fails to
communicate appropriately with customers, fails to
deal with complaints effectively, sells or
recommends unsuitable products or solutions to
customers, fails to provide them with adequate
information to make informed decisions or provide
unsuitable investment for financial planning advice
to customers, or fails to do any of the foregoing on
an ongoing basis after initial sales, amongst other
things. This risk may also arise as a result of
employee (mis)conduct.
Conflicts of interest Key management actions
Quilter faces significant potential and actual • Conflicts of interest register and monitoring
conflicts of interest, including those which result • Conflicts identification and management
from Quilter’s advised distribution channel. If the training
Group fails to manage conflicts of interest between • Conflicts of interest policy compliance
its advice channel and other businesses across the
Group, it could result in reputational damage,
regulatory liability or customer restitution, which
could have a material adverse impact on Quilter’s
business, financial condition, results of operations
and prospects, and reputation.
Investment performance Key management actions
An important factor in Quilter’s ability to maintain • Investment strategy
and grow its customer base and its network of • Investment risk policy and standards
advisers is the investment performance of the compliance
customer assets that Quilter manages. Actual or • Investment performance monitoring
perceived underperformance of customer assets
that are managed by Quilter could have a material
adverse effect on Quilter’s business, financial
condition, results of operations and prospects, and
reputation.
Insurance risks
The risk of a reduction in Own Funds from adverse experience or change in assumptions relating to
claims, policyholder behaviours, mortality, morbidity, longevity or expenses, resulting in an adverse
impact to earnings or reduced solvency.
Insurance risks Key management actions
Quilter has exposure to mortality risk (risk of higher • Underwriting standards and processes
than expected rate of death claims on life • Claims investigations and pricing reviews
protection business) and morbidity risk (risk of • Reinsurance
higher than expected rate of claims on critical • Budgeting and expense management
illness protection business) from its life assurance
business, which issues policies that carry certain
guaranteed benefits upon the death, or defined
illness, of the policyholder. These risks could be
aggravated by any potential failure in underwriting
processes and controls designed to identify sub-
standard lives at the new business stage.
Operational risks
The risk of loss (or unintended gain/profit) arising from inadequate or failed internal processes, or from
personnel and systems, or from external events (other than financial or business environment risks),
resulting in an adverse impact to earnings or reduced solvency.
Adviser and customer proposition Key management actions
• Ongoing adviser training
Failure by Quilter to offer products, services and • Customer communication programme
platforms that meet adviser and customer needs • Suitability reviews
and which are considered suitable, or failure to • Product and customer-related policies and
fairly and honestly communicate with advisers and standards
customers, could result in advisers ceasing to • Product and proposition governance
recommend Quilter’s products or services, or
recommending fewer of Quilter’s products or
services, and declining persistency of Quilter’s
products. The asset classes or investment strategies
underlying the portfolios managed by Quilter may
become less attractive to customers or their
advisers, which could reduce demand for Quilter’s
products and have a material adverse impact on
Quilter’s business, financial condition, results of
operations and prospects, and reputation.
Information technology Key management actions
Quilter uses computer systems to conduct its • IT estate enhancement programmes
business, which involves managing and • Active systems monitoring
administering assets on behalf of customers in its • Resilience plans
wealth portfolios and on its platforms. Quilter’s • IT policies and standards compliance
business is highly dependent on its ability to access
these systems to perform necessary business
functions and to provide adviser and customer
support, administer products, make changes to
existing policies, file and pay claims, manage
customer’s investment portfolios and produce
financial statements and regulatory returns. Failure
to manage this risk could have a material adverse
impact on Quilter’s business, financial condition,
results of operations and prospects, and
reputation.
Data information and cyber threats Key management actions
Quilter’s business, by its nature, requires it to store, • Cyber threat defences and monitoring
retrieve, evaluate and utilise customer and Resilience and continuity plans
Company data and information, which is highly • Data governance arrangements
sensitive. Quilter is subject to the risk of IT security • Information security and data protection policy
breaches from parties with criminal or malicious and standards compliance
intent (including cyber crime). Should Quilter’s
intrusion detection and anti-penetration software
not anticipate, prevent or mitigate a network failure
or disruption, or should an incident occur to a
system for which there is no duplication, it may
have a material adverse effect on Quilter’s
customers, business, financial condition, results of
operations and prospects, and reputation.
Third party risk Key management actions
Quilter outsources and procures certain functions • Third party criticality assessments, due
and services to third parties and may increase its diligence and monitoring
use of outsourcing in the future. If Quilter does not • Resilience plans and exit planning
effectively develop and implement its outsourcing • Third party risk management policy and
strategies and its internal capability to manage such standards including supplier management
strategies, third party providers do not perform as practices compliance
anticipated, or Quilter experiences technological or
other problems with a transition, it may not realise
productivity improvements or cost efficiencies and
may experience operational difficulties, increased
costs and loss of business, and damage to its
reputation.
Legal and regulatory risks
The risk of failing to comply with existing or new regulatory and legislative requirements including
standards, principles and practices, or an increased level of regulatory intervention resulting in sanctions
or a capital add-on being imposed or a temporary restriction on our ability to operate.
Legal and regulatory risk Key management actions
Quilter’s regulated businesses are subject to • Compliance advice and assurance programme
extensive regulation both in the UK (by the • Legislative and regulatory horizon scanning
Prudential Regulatory Authority (“PRA”) and the • Training and staff awareness programme
Financial Conduct Authority (“FCA”) and • Compliance policy and standards compliance
internationally, and Quilter faces risks associated
with compliance with these regulations. Quilter’s
businesses are subject to the risk of adverse
changes in laws, regulations and regulatory
requirements in the markets in which they operate.
Regulatory reform initiatives could also lead to
increased compliance costs or other adverse
consequences for firms within the financial services
industry, including Quilter. Failure to manage these
risks could have a material adverse impact on
Quilter’s business, financial condition, results of
operations and prospects, and reputation.
Financial crime Key management actions
Quilter is required to comply with all applicable • Mandatory staff training
financial crime laws and regulations (including anti- • Numerous controls including due diligence,
money laundering, anti-terrorism, sanctions, anti- politically exposed persons assessment, and
fraud, anti-bribery and corruption and insider sanctions screening
dealing) in the jurisdictions in which it operates. • Financial crime policies and standards
Where Quilter is unable to comply with applicable
laws, regulations and expectations, regulators and
relevant law enforcement agencies have the ability
and authority to impose significant fines and other
penalties, including requiring a complete review of
business systems, day-to-day supervision by
external consultants and ultimately the revocation
of regulatory authorisations and licences. Failure to
manage these risks could have a material adverse
impact on Quilter’s business, financial condition,
results of operations and prospects, and
reputation.
Statement of Directors’ responsibilities in respect of the Annual Report and Accounts and the financial
statements
The 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 law they are required 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 on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or
loss for that period. In preparing each of the Group and parent Company financial statements, the Directors
are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant and reliable;
• state whether they have been prepared in accordance with IFRSs as adopted by the EU;
• assess the Group and parent Company’s 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
parent Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of
the parent Company and enable them to ensure that its financial statements comply with the Companies Act
2006. They are responsible for such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and corporate governance statement that complies with
that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting standards, give
a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and parent
Company and the undertakings included in the consolidation taken as a whole; and
• the Strategic Report includes a fair review of the development and performance of the business and
the position of the issuer and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Group’s position and performance,
business model and strategy.
Signed on behalf of the Board
Paul Feeney Tim Tookey
Chief Executive Officer Chief Financial Officer
11 March 2019
42: Related party transactions
In the normal course of business, the Group enters into transactions with related parties. These are conducted
on an arm’s length basis and are not material to the Group’s results. There were no transactions with related
parties during the current and prior year which had a material effect on the results or financial position of the
Group except for the repayment of intercompany indebtedness with Old Mutual plc which has been disclosed
in note 32: Borrowings. Except for these intra-group loan repayments, the nature of the related party
transactions of the Group has not changed over the course of the year.
42(a): Transactions with previous Parent company, Old Mutual plc
Prior to the Group’s Managed Separation from Old Mutual plc in June 2018, the Group had various transactions
with Old Mutual plc and other related entities within the Old Mutual group, all of which were in the normal
course of business. All receivables and payables were settled at the point of separation, resulting in receivables
and payables of £nil as at 31 December 2018 (2017: receivables were £28 million and payables were £790
million). In addition, the Group incurred £3 million of interest expense in relation to intercompany
indebtedness at the time, paid to Old Mutual plc prior to separation in 2018 (2017: £60 million) and received
£nil income (2017: £5 million in respect of other transactions with Old Mutual plc group).
42(b): Transactions with key management personnel, remuneration and other compensation
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly, including any director (whether executive or
otherwise) of the Group. Details of the compensation paid to the Board of Directors as well as their
shareholdings in the Company are disclosed in the Remuneration Report.
The summary of compensation of key management personnel is as follows:
42(c): Key management personnel compensation
At At
31 December 2018 31 December 2017
£’000 £’000
Salaries and other short-term employee benefits 13,037 9,610
Post-employment benefits 100 80
Share-based payments 6,876 4,089
Termination benefits 346 –
Total compensation of key management personnel 20,359 13,779
42(d): Key management personnel transactions
Key management personnel and members of their close family have undertaken transactions with the Group
in the normal course of business.
The Group’s products are available to all employees of the Group on preferential staff terms. The impact of
this on the financial statements is immaterial. During the year ended 31 December 2018, key management
personnel and their close family members contributed £3 million (2017: £6 million) to Group pensions,
investments and life insurance products. The total value of investments in Group pensions and investment
products by key management personnel was £19 million (2017: £16 million).
42(e): Other related parties
Details of the Group’s staff pension schemes are provided in note 35. Transactions made between the Group
and the Group’s staff pension schemes are made in the normal course of business.
- ends -
Enquiries:
Investor Relations:
John-Paul Crutchley +44 (0)20 7002 7016
Keilah Codd +44 (0)20 7002 7054
Company Secretary:
Patrick Gonsalves +44 (0)20 7778 9670
Camarco
Geoffrey Pelham-Lane +44 (0)20 3757 4985
Aprio (South Africa)
Julian Gwillim +27 (0)11 880 0037
About Quilter plc:
Quilter plc is a leading wealth management business in the UK and internationally, helping to create
prosperity for the generations of today and tomorrow.
Quilter plc oversees £109.3 billion in customer investments (as at 31 December 2018).
It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset
investment solutions; and discretionary fund management.
The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.
Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private
Client Advisers; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the
Multi-asset investment solutions business. Wealth Platforms includes the Old Mutual Wealth UK Platform;
Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life
assurance business.
The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:
• The Multi-asset business is now Quilter Investors
• Intrinsic to Quilter Financial Planning
• The private client advisers business is now Quilter Private Client Advisers
• The UK Platform to Quilter Wealth Solutions
• The International business to Quilter International
• The Heritage life assurance business to Quilter Life Assurance
• Quilter Cheviot will retain its name.
JSE Sponsor
J.P. Morgan Equity South Africa Proprietary Limited
Date: 28/03/2019 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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