Introduction to Brewin Dolphin August 2020
The opportunity Wealth management landscape 2
A large addressable UK wealth market UK financial and private pension wealth (1) UK individuals earning over £150k p.a. (2) 2012 2018 22,000 Scotland (5.1%) 5,000 North East (1.1%) 15,000 +70% Yorkshire £8.2trn £4.8trn (3.4%) 4,000 23,000 Northern Ireland North West (0.9%) (5.3%) 36,000 Midlands (8.3%) 50,000 East Anglia (11.5%) South West and Wales 30,000 150,000 London (6.9%) (34.5%) 100,000 South East (23.0%) 435,000 individuals earning over £150k p.a. (+7% yoy) (1) Source: ONS: Total Wealth: Wealth in Great Britain (2) Source: HM Revenue & Customs: UK Income Tax Liabilities Statistics, includes individuals paying the additional tax rate (data as of 2019) 3
Advice gap driving sector opportunities • Number of UK adults that have had regulated financial advice Onus on individuals to provide for in the last 12 months compared to those that have not had retirement: shift from employers to advice in the same period employees Had regulated 9% financial advice in 2018 4.5m the last 12 months • Increased demand for financial 6% 3.2m Not had regulated planning and expert investment financial advice in 2017 the last 12 months; 25% might have a need advice: ageing population and 12.8m for it generational change 36% 55% Not had regulated 18.2m 28.3m 69% financial advice in 35.1m the last 12 months; • Demand across all segments of less likely to have a need for it OR society (mass market, mass affluent, insufficient information HNW) Source: FCA Interim consumer research to inform FAMR 2018 4
Opportunities in the intermediary market Supply Demand 5,246 26,677 3,022,674 501,012 Advice firms Advisers Retail clients paying New retail clients for ongoing advice paying for ongoing advice • Continued positive growth characteristics • A highly fragmented advice market in the UK • 89% of advice firms have 5 advisers or less Source: FCA RMA-B returns for 2018 5
A fragmented market with diversified business models Market opportunity Bespoke Investment Private Managed managers banks Vertically integrated Portfolio Robo Model advisers portfolios Self Platforms directed Mass Affluent Market Mass market affluent £250k- HNW VHNW definition <£100k £100-250k £1m £1-5m >£5m Complex Non-advised Advised needs Advice 6
Scale increasingly important in a consolidating market UK wealth management by AUM (£bn) Discretionary Advisory & other 112 54 (1) 51 49 (2) 45 45 42 33 26 25 24 24 22 19 18 (3) 15 14 14 14 14 14 13 13 12 Source: Latest Company reports and PAM 2019 directory (August), market data as of Sept 2019. (1) Pro forma Lloyds transaction. £13bn Lloyds AuM. (2) Pro-forma Smith & Williamson acquisition. (3) Pro-forma for sale of DFM portfolio. 7
Brewin at a glance 8
Our Purpose Enriching Lives A more rewarding life Thinking beyond wealth Doing more of what’s important Individuals and those close to them Wealth as an enabler Clients and colleagues 9
Our strategy We are focused on growth Provide more Further develop choice for more our client clients experience Build a platform Maintain a culture we are proud of for growth and creating shareholder value 10
Our scale Founded in 1762 with over 250 years of experience A large player in the UK and Ireland ➢ £45.0bn* of FuM ➢ £40.1bn* of discretionary FuM A national footprint: local knowledge, national expertise ➢ 34 offices across the UK and Ireland ➢ c.1,800 employees ➢ >300 investment managers ➢ >100 financial planners ‘Introducers’ confident to recommend and use us ➢ 95% of clients would recommend us ➢ >1,700 relationships with firms of IFAs ➢ >500 relationships with professional services firms Robust balance sheet and capital position ➢ Capital adequacy ratio of 291%* *as at 30 th September 2019 11
Expanding our distribution and propositions Distribution Duncan Lawrie Asset Management Dundee IFA Winchester Epoch/ acquisition acquisition office Bath office Financial Cambridge planning 8 Waterloo Aylwin office academy Place acquisition ICIIL FY 2013 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Professional Mathieson BPS WealthPilot Services Offering Consulting acquisition 1762 from Brewin Dolphin Product and proposition 12
Our technology transformation journey Client BPS – MyBrewin online self MyBrewin IOS and WealthPilot service online client android financial offering portal apps health tool FY 2016 FY 2017 FY 2019 FY 2020 FY 2015 FY 2018 Avaloq Eximius: Integration custody and Order capability for settlement Management intermediaries system System Client engage – True Potential: Workspace refresh: CMS system Financial planning move to laptops and client Skype / Teams providing management tool staff the ability to work remotely Internal 13
Key trends and opportunities Trends Brewin Dolphin • Continued shift from DB to DC Client needs ✓ Introduction of new propositions • Pension reforms becoming more ✓ Expanding advice capability • Ageing population complex • Importance of digital interface ✓ Mobile app New digital • Failure of robo-advice to gain scale ✓ Digital offerings (BPS, WealthPilot) technologies Enhanced • Ability to reach customers ✓ Branch network expanded to 34 customer reach • MPS gaining traction ✓ Growing IFA relationships, +1,700 increasingly important Increasing ✓ MSCI ESG rating of AA 1 • Greater demand for alternatives demand for ✓ Stewardship code embedded • Growth in ESG products alternatives & ✓ Company wide ESG initiative underway ESG solutions • Cost and regulatory pressures impacting SME’s ✓ Four acquisitions completed in 2019 M&A • Scale & consolidation 1 As of November 2019 14
More choice for more clients Complexity of client advice needs 1762 • Complex financial advice service Wealth Core - Face-to-face delivery - Advice across all areas of complex clients’ financial • Wealth advice service needs - Face-to-face delivery WealthPilot - Broad range of investment - Advice across all areas of solutions clients’ financial needs - Headline fee 115-150bps • Simplified financial advice - Broad range of investment service solutions BPS - Face-to-face in office & digital - Headline fee 130bps (IM only) delivery 150bps (integrated) • Non advised self select - Pensions, investment & investment service protection - Fully automated delivery - Active & passive investment solutions - £2,000 entry point - Fee 100bps - GIA, ISA, JISA & Bare Trusts - Risk rated passive portfolios - Fee 70bps 15
Broadening of our direct propositions and services Market opportunity Bespoke Core offering Managed Advice-led 1762 Financial planning-led (more complex Portfolio needs) WealthPilot BPS Managed portfolio Model Digital self (less complex portfolios service needs) Self directed Mass Affluent Market Mass market affluent £250k- HNW UHNW definition <£100k £100-250k £1m £1-5m >£5m Complex Non-advised Advised needs Advice 16
Mathieson Consulting Consolidator – inorganic activity Completed Apr 2019 Rationale • Expands professional services distribution channel ICIIL • Complements core business Completed Oct 2019 • Located in Birmingham, Rationale nationwide coverage • Builds scale in fast-growing economy Economics • Leverages existing platform + c.£1.0m p.a. income • Synergies from completion + 6 report writers Economics Aylwin + c.€17.0m income Completed Mar 19 + 33 front office staff + c.5,000 clients Rationale • + c.AuMA €2.9bn Financial Planning led acquisition combined with opening of new Winchester Epoch office Completed Aug 19 • Increased advice-led capability in the region Rationale • Financial Planning led acquisition Economics • Established Bath office + c.£1.2m p.a. income • Additional advice-led capability + 2 advisers • Expands charity service offering + c.400 clients Economics Duncan Lawrie AM + c.£4.4m p.a. income Completed May 17 + 8 advisers Economics + c.600 clients + c.6.2m p.a. income + c.FUM £735m 17 + 18 investment professionals
Building our Intermediaries business Our success has been built on the execution of our distribution strategy and propositional evolution • Hired talent with strong sales track record • People Embedded sales management structure • Created sales support function Distribution • Worked in partnership with key retail platforms Accessibility • Leveraged third party sales teams • Specialist teams Knowledge • Business consultancy style Proposition • Adviser-driven investment solutions Value • Collateral development 18
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