Quilter (QLT) Investor presentation summary

Market opportunity and industry change

• £100bn+ in customer assets; advice-led investment solutions target affluent customers in the UK and selected international markets.

• The UK target market included c.5 million affluent adults with £1.7tn in wealth and over £100k in liquid assets.

• Post-RDR adviser withdrawals and higher regulatory costs pressured smaller firms, while pension reform, ageing demographics and wealth transfers increased demand for advice.

• MiFID II took effect on 3 Jan 2018; first full ex-post costs and charges disclosures were due 3 Jan 2019, prompting demand for more meaningful adviser conversations.

• Regional boutiques, successful consolidators and scale players were positioned to benefit as adviser numbers fell and advice demand grew.

Advice model and growth priorities

• Multichannel model served high-net-worth, affluent and mass-affluent customers through private client advisers, Quilter Financial Planning and investment solutions.

• Quilter Financial Planning had ~1,600 restricted financial planners; the private client channel had ~220 investment managers and advisers.

• PCA, launched in Oct 2015, completed 23 acquisitions by Jun 2018, operated from six UK offices, advised over 6,000 households and had £1bn in integrated assets at Jun 2018.

• Advice priorities included adviser recruitment and retention, productivity, targeted acquisitions, technology and training, and stronger alignment across investment propositions.

• The Financial Adviser School had 83 students enrolled and 42 graduates to date at 31 Dec 2017.

Financial performance

• H1 2018 revenue was £385m, up 11% YoY; adjusted profit before tax was £110m, up 16%, and adjusted EPS was 5.5p, up 25%.

• AuMA was £116.5bn at H1 2018, up 2% from year-end 2017; revenue margin was 57 bps versus 56 bps in H1 2017.

• H1 2018 expenses rose 10% YoY to £275m; operating margin increased to 29% from 27%.

• Integrated flows were £3.0bn in H1 2018, down 12% from £3.4bn in H1 2017.