Rathbone Brothers : 2020 report and accounts

Facing the future responsibly

Rathbone Brothers Plc Report and accounts 2020

About Rathbones

Rathbones provides individual investment and wealth management services for private clients, charities, trustees and professional partners. We have been trusted for generations to manage and preserve our clients' wealth. Our tradition of investing and acting responsibly has been with us from the beginning and continues to drive us forward. Our ambition is to be recognised as the UK's most responsible wealth manager.

2020 financial highlights

Profit before tax	Underlying profit before tax* 1	Basic earnings per share	Underlying earnings per share* 1
£43.8m	£92.5m	49.6p	133.3p
(2019: £39.7m)	(2019: £88.7m)	(2019: 50.3p)	(2019: 132.8p)
Dividends paid and	Return on	Underlying return on
proposed per share	capital employed (ROCE)	capital employed (ROCE)*2
72.0p	5.3%	13.6%
(2019: 70.0p)	(2019: 5.7%)	(2019: 14.2%)

For a full five-year record, please see page 223

• This measure is considered an alternative performance measure (APM). Please refer to pages 35-36 for more detail on APMs

1. A reconciliation between underlying profit before tax and profit before tax is shown on page 35
2. Underlying profit after tax as a percentage of underlying quarterly average equity at each quarter end

Contents

Strategic report	​
Business overview	1
Our purpose	2
Chairman's statement	4
Rathbones at a glance	6
Our business model	8
Stakeholder engagement (s172)	10
Chief executive's review	14
Our investment case	17
Our market and opportunities	18
Our strategy	20
Our strategy in action	22
Key performance indicators (KPIs)	30
Financial performance	33
Segmental review	37
Financial position	42
Liquidity and cash flow	45
Risk management and control	46
Responsible business report	52

Governance
Corporate governance report	76
Group risk committee report	92
Audit committee report	95
Nomination committee report	100
Remuneration committee report	103
Directors' report	127
Statement of directors'	130
responsibilities in respect
of the report and accounts

Financial statements	​
Independent auditor's report to the	132
members of Rathbone Brothers Plc
Consolidated financial statements	142
Notes to the consolidated	146
financial statements
Company financial statements	203
Notes to the company	206
financial statements
Further information
Five-year record	223
Corporate information	223
Our offices	224

A responsible business

At Rathbones, we have a clear understanding of who we are as a business, supported by a strong ambition for our future. Our purpose represents our commitment as a business to all of our stakeholders and wider society, while our ambition provides our long-term goal for the future. Underpinning both of these is our strategy.

Our purpose is to think, act and invest responsibly

We deliver on our purpose through our corporate values:

Responsible and entrepreneurial	Collaborative and empathetic
in creating value	in dealing with people
Courageous and resilient	Professional and high-performing
in leading change	in all our actions

Our ambition is to be recognised as the UK's most responsible wealth manager

We are committed to growing and preserving wealth for our clients. Read more on page 17

Our purpose and ambition are achieved through a clear strategy

Read more about our strategy on pages 22-29

Institutional-quality	Relationship-led
investments	tailored and flexible
whole of market
Multi-generational	Partnership
for clients of today and tomorrow	working together to deliver
	the best client outcomes

Enriching the client and adviser proposition and experience

Supporting and delivering growth

Inspiring our people

Operating more efficiently

rathbones.com

1

Strategic report

|  Our purpose

We are committed to investing for everyone's tomorrow.

Our commitment to lead in responsible wealth management stems from our purpose in society, founded on the values passed down from generation to generation. Thinking, acting and investing responsibly guides our actions and drives us to pursue our strategy with consistency and resilience, year after year. It also keeps us on course as we adapt and respond to the unprecedented crisis that the world is facing.

We have a fiduciary responsibility to our clients: investing for their long- term goals. This focus on the long-term enables us to create value for our clients whilst also making a positive contribution to society. And today, it is more than ever at the heart of our commitment to invest for everyone's tomorrow. We believe that our actions add up to what we stand for. As an example of our commitment to the future, we have built a responsible business framework, which will enable us to deliver on our initiatives, including responsible investment agenda, diversity and inclusion, community investment and reducing our environmental impact.

2	Rathbone Brothers Plc Report and accounts 2020

In 2020, we have taken a number of steps to ensure that, as a business, we are ready to face the future responsibly:

p.22

In year two of our strategy, we have continued to enhance our client proposition with significant advancement of our digital proposition.

p.52

We have developed a new responsible business framework, which will provide the blueprint for driving long-term, sustainable value for

our broader stakeholders.

p.70

We have undertaken a robust review of our approach to climate-related financial risks and are proactively reporting against the Task Force on Climate-related Financial Disclosures (TCFD) framework.

p.59

We have continued to focus on addressing our gender and ethnicity balance and embedding diversity and inclusion into our day-to-day working practices.

rathbones.com

3