AJ Bell : 2023 Annual Report

Growing with purpose

AJ Bell plc

Annual Report and Financial Statements 30 September 2023

01 Our purpose

Strategic report

04 At a glance

06 Chair's statement

1. Chief Executive Officer's review

1. Market overview

1. Our business model

1. Our strategy to achieve our purpose

1. Key performance indicators

1. Stakeholder engagement

1. Section 172 statement

1. Responsible business

1. Non-financialand sustainability information statement
2. Financial review

1. Risk management

1. Principal risks and uncertainties

1. Viability statement

Governance

1. Chair's introduction

1. Board of Directors

1. Executive Committee

1. Corporate Governance report

1. Nomination Committee report

1. Audit Committee report

1. Risk & Compliance Committee report

1. Directors' Remuneration report

1. Directors' report

1. Statement of Directors' responsibilities

Financial statements

128 Independent auditor's report to the members of AJ Bell plc

1. Consolidated income statement
2. Consolidated statement of financial position
3. Consolidated statement of changes in equity
4. Consolidated statement of cash flows
5. Notes to the consolidated financial statements

1. Company statement of financial position
2. Company statement of changes in equity
3. Notes to the Company financial statements

Other information

1. Consolidated unaudited five-year summary
2. Glossary
3. Definitions
4. Company information

Find out how we are helping people invest and more at

ajbell.co.uk

Growing with purpose

At the heart of our business is a clear and succinct purpose which drives everything we do: to help people invest.

We want to make investing as easy as possible for our customers. Our dual- channel platform and our in-house range of low-cost investment solutions help people take control of their investments, whether they do that on their own or with the help of a financial adviser. Our offering, combined with high service standards and competitive charges, positions us well to continue attracting new customers and assets to our platform and further increase our market share."

Michael Summersgill

Chief Executive Officer

Our purpose

At the heart of our business is a clear and succinct purpose which drives everything we do:

To help people invest

We want to make investing as easy as possible for our customers to enable them to take

control of their finances and realise their financial goals.

What we do

Serving the needs of our customers

AJ Bell is one of the UK's largest and best-regarded investment platforms. Whether through a financial adviser, or managing your investments yourself, we offer a range of products to help you achieve your financial goals.

Full-service and simplified	Wide investment range	First-class service model to	Dual-channel platform	Efficient operating model
supplemented by in-house	support our digital	operating at scale in both	enables us to keep costs
platform propositions
investment solutions	propositions	D2C and advised markets	low for customers

Business model See p20 and 21

How we do it

We make investing easier

Our company is built on a set of guiding principles that define the way we do business.

Our guiding principles

Principled	Knowledgeable	Straightforward	Personal	Ambitious
We act	We know	We simplify	We put	We set high
with integrity	our stuff	the complex	people first	standards

We want to provide our customers the easiest investment platform to enable them to take control

of their finances and realise their financial goals.

	Our strategy	See p22 to 25
Sustainable	Easy-to-use	Excellent	High staff
growth	platform propositions	service	engagement

Creating sustainable value

Responsible propositions		Responsible employer		Supporting our		Environmental awareness
Offering products and		Developing and supporting our		local communities		Minimising our impact on
services that are aligned		people to help them achieve		Playing a positive and		the environment.
with our purpose.		their potential.		supporting role in our
				local communities.
See more p36 to 38		See more p39 to 43		See more p44 and 45		See more p46 to 54

AJ Bell plc Annual Report and Financial Statements 2023 01

The platform offers a very good user experience, it's simple, the login process is easy and then once you're in, it's easy to find my dashboard for a top-level view of how I'm doing and then take advantage of the premade investing solutions. I have a feeling of control and confidence that I didn't have beforehand.

I feel like my money is safe and that I'm on a reliable platform."

Oonagh

AJ Bell customer

#FeelGoodInvesting

See more at ajbell.co.uk/group/feel-good-investing

Helping Oonagh invest for her financial independence

Age: 52 years old

Mission: To achieve financial independence

Oonagh, mother of three children, recently started investing and chose AJ Bell as

her starting point. Attracted to the tax efficiencies on offer, she contributes to her ISA and SIPP each month. She wanted to be a role model for her children in being able to speak about investing, particularly for her two girls. To her, financial independence is being more confident that she will be able to cover any big bills that may arise in the future.

Oonagh chose AJ Bell for its ease of use and is now enjoying the rewards of investing with us.

Oonagh is a real AJ Bell customer sharing her honest opinions.

Strategic report

Governance

Financial statements

Other information

Strategic report

04 At a glance

06 Chair's statement

10 Chief Executive Officer's review

16 Market overview

20 Our business model

22 Our strategy to achieve our purpose

26 Key performance indicators

28 Stakeholder engagement

30 Section 172 statement

32 Responsible business

55 Non-financial and sustainability information statement

56 Financial review

60 Risk management

63 Principal risks and uncertainties

69 Viability statement

02 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 03

At a glance

We make investing easier

AJ Bell is one of the UK's largest and best-regarded investment platforms. Over 490,000 customers currently trust us with their investments, and by continuously striving to make investing easier,

we aim to help even more people take control of their financial futures. We strive to deliver a market-leading platform by combining low cost, ease of use and excellent customer service.

Our awards

Top 100 Best Large Company to Work for in the UK

for 6 consecutive years

Money Marketing awards Provider of the Year

award for 2 consecutive years

Which? Recommended Platform provider

for 5 consecutive years

Strategic report

Governance

Financial statements

Other information

Our propositions Advised			D2C
		Customers			Customers
	159,256+10%			317,276+13%
	2022: 145,371			2022: 280,281
		AUA			AUA
		£48.2bn+8%			£22.7bn+18%
		2022: 44.8bn			2022: 19.3bn

Full-service

Established platform propositions offering a wide range of investment choice and functionality.

Simplified

Digital-only platform propositions offering an easy-to-use, streamlined service in the advised and D2C markets.

Investment solutions

1. range of in-house funds and MPS solutions which support our offerings in both the advised and D2C market segments.

AJ Bell is rated as 'Excellent' on independent

review site Trustpilot with a score of 4.8 out	Citywire Growth shortlist winner: AJ Bell Asset
Management for the VT AJ Bell Adventurous Fund
of 5.0 from over 4,000 reviews, demonstrating
our continued strong customer service.

Provides simple, transparent, low-cost investment management solutions

through advisers and direct to customers.

Performance in 2023

Total assets under administration1		Total customers1
£76.1bn	491,402
+10%	+12%
Revenue		Profit before tax  (PBT)
£218.2m		£87.7m
+33%	+50%

1. Total assets under administration (AUA) and customers include non-platform customers and AUA. See pages 26 and 27 for definitions of Alternative Performance Measures.

Highlights

• Invested in our brand through our new multi-channel advertising campaign and five-year partnership with the AJ Bell Great Run Series.
• Launched our pension finding service for new and existing customers.
• Delivered excellent customer service, with a high customer retention rate of 95%.
• Achieved significant growth in AJ Bell Investments with closing AUM of £4.7 billion, up 68% in the year.

Market opportunity

Total addressable market

~£3tn

~£1tn

Curently held on platforms

~£2tn

O platform

A fast-growing platform market

£bn

986	912
716

308	473		+11%
				CAGR
2012	2015	2018	2021	2022

We operate in a fast-growing investment platform market. The long-term structural drivers of market growth are strong, with around two-thirds of our estimated £3 trillion target addressable market not yet on a platform.

See Market overview p16

04 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 05

Chair's statement

Maintaining our focus

Strategic report

Governance

Financial statements

Other information

AJ Bell is a great business with a justifiable reputation for innovation, customer focus and a commitment to delivering real value to customers and advisers."

Fiona Clutterbuck

Chair

Dear shareholder

I am delighted to present my first Annual Report as your new Chair.

Since my appointment on 1 May 2023, I have spent time getting to know many people across the business, as well as having the pleasure of engaging with some of our shareholders and other key stakeholders, discussing both AJ Bell's business and the wider platform market. It has been a really interesting and informative period since joining, which has reaffirmed my initial very favourable impression of the people and the business. I am very excited to lead the Board and support the executive team in the goals we have set ourselves.

I am pleased to report that we have delivered a strong financial performance during the year with PBT of £87.7 million. Over the past 12 months customer numbers increased by 50,813 to 491,402 and we delivered £4.1 billion of net inflows, ending the year with total AUA of £76.1 billion. This strong performance demonstrates the resilience of our business model during a challenging year and continued uncertainties around the UK economy. The Financial review contains further information on this year's performance on pages 56 to 59.

As the uncertainties in the wider economy continued into 2023, it created further challenges for our customers, our people and our wider stakeholders. As a Board we were particularly mindful of this and so our focus remained on the wellbeing of our staff, while maintaining a high-quality,value-for-money service to our customers and delivering positive outcomes for all our stakeholders.

Dividend per share since IPO

Pence

11.96

5.0010.75

7.37

6.16

4.836.96

2019	2020	2021	2022	2023
Ordinary dividend		Special dividend

Our governance structure and cohesive culture provide a solid framework for achieving our long-term strategic goals. The Board remains focused on delivering AJ Bell's purpose; to help people invest.

Culture, purpose and stakeholder engagement

The Board plays a vital role in shaping and embedding a strong and healthy culture through promoting the core values and principles of the Group and this continued to be a focus throughout the year. We welcomed the opportunity to engage with our staff and shareholders in person again this year, providing invaluable insight into the operation and culture of our business. I was delighted to be appointed as the nominated Employee Engagement Director in May, which has given me an opportunity to refresh the Employee Voice Forum (EVF).

During the year we also reviewed the AJ Bell Way and our guiding principles; challenging ourselves on their continued alignment with our purpose and culture following significant growth of the business. It was encouraging to see the level of engagement from our people and our customers and advisers, affirming how well our core values resonate with our key stakeholders. Whilst the key elements of our guiding principles remain relevant, some refinements have been made to simplify them and reflect the feedback received to ensure they continue to be embraced by our people on a day-to-day basis.

Consideration of our wider stakeholders in some of our key decisions in the year are outlined in our Section 172 statement on pages 30 to 31.

We recognise the importance of an engaged workforce and it was pleasing to see that this year's staff survey showed positive progress with an overall response rate of 87%. Our people are at the heart of our continued growth and success and so how we motivate, reward and support them is a key priority for the Board. The introduction of the new free share award scheme for all employees has been very well received and we expect the level of share ownership to increase further for

the coming year. Our pay and benefits package introduced at the start of FY23 has also seen further enhancements to base pay and pension contributions for the coming year.

We have made good progress embedding our Diversity and Inclusion framework. As reported last year our primary focus was on the senior management and talent pipeline where I am pleased to see we have already made positive steps on the recruitment at executive level. The Board will continue to monitor and challenge progress on our initiatives for the wider workforce where we expect to see further improvements in the coming year.

Further details on our ESG-related activities can be found in our Responsible Business section on pages 32 to 54.

Board changes and sucession

On 1 May 2023 I succeeded Baroness Helena Morrissey as Chair. On behalf of the Board, I would like to thank Helena for her significant contribution to AJ Bell as Chair and look forward to her continued involvement through her consultancy role where we are benefitting from her passion and commitment to diversity and inclusion.

As previously announced when Andy Bell stepped down from the Board in September 2022, it was agreed that he would have the right to nominate a Non-Executive Director to represent his interests on the Board whilst a significant shareholder. This agreement was formalised in July 2023 when we announced that Les Platts would join the Board as Andy's Representative Director. I would like to take this opportunity to formally welcome Les to the Board and very much look forward to working with him. Les' in-depth knowledge of the financial services sector and AJ Bell in particular, will further enhance the experience on the Board and help us drive the future growth of the Company.

During the year we resumed our search for two new independent Non-Executive Directors (NED), the first being a replacement for Simon Turner who has completed nine years' service and will step

down from the Board once a successful handover is complete. The Board is extremely mindful of the importance of having a diverse range of skills, experience and perspective around the Board table and so this was at the forefront of our minds throughout the recruitment process. I am pleased to report that since the year end we have appointed Fiona Fry as an independent Non-Executive Director with effect from 7 December 2023. Fiona will succeed Simon Turner, as Chair of the Risk & Compliance Committee, subject to regulatory approval. Fiona is a highly experienced risk professional, having spent the majority of her career at KPMG where, as a partner she focused on financial services regulation. Fiona sat on the UK Board of KPMG for six years. She was previously Head of investigations at the Financial Services Authority (now the FCA). Fiona is currently Chair of the Risk Committee at Aviva Insurance Limited.

Our commitment to addressing both the Parker Review recommendations and the FCA diversity requirements remains a key consideration as we continue our search for a further independent NED to join the Board in the coming year. Whilst we are pleased with our progress, we acknowledge there is still more to be done to continue to drive greater diversity at both Board and executive level.

Further details on Board changes can be found in the Nomination Committee report on pages 88 to 91.

Dividend

In line with our commitment to a progressive dividend, the Board is pleased to announce a final ordinary dividend of 7.25p per share, reflecting the financial strength of the business and strong capital position.

The final ordinary dividend will be paid, subject to shareholder approval, at our AGM on 30 January 2024, to shareholders on the register at the close of business on 12 January 2024.

This brings the total ordinary dividend for the financial year to 10.75p per share, representing an increase of 46% on the previous year.

06 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 07

Chair's statement

Board priorities

Performance and resilience

I am very proud of the strong performance that the business has delivered in 2023. However, I am acutely aware of the need to continue growing the business, whilst at the same time managing our cost base against a backdrop of significant macroeconomic uncertainty. These are two key priorities in the coming year. I am also keen that we continue to embrace the entrepreneurial culture which was

so much a hallmark of the business under Andy Bell's leadership.

Performance such as that which the business has demonstrated this year is only achievable if the business is resilient; technology plays a very important role in embedding this resilience so this too will be a focus for FY24.

Culture

AJ Bell has always justifiably prided itself on a strong cohesive culture. In my first few months as Chair I have had the opportunity to experience this first hand. Interactions with my colleagues across the business have confirmed an open and transparent culture that permeates throughout the whole organisation. Our role as a Board is to monitor how we nurture this culture and ensure it remains a real strength as we continue to grow.

One of the most important facets of the AJ Bell purpose-led culture has been its extraordinary focus on doing the right thing for its customers. We place good customer outcomes at the heart of everything we do, with good value products, simple communications and strong processes to support our customers.

The initial implementation of the Consumer Duty has been a key area of focus for the Board and the business as a whole during the year, with Simon Turner, our Chair of the Risk & Compliance Committee being appointed as our designated Non-Executive Director Consumer

Duty Champion. Although we believe our culture is aligned with the requirements of Consumer Duty, we are by no means complacent and the Board's focus during FY24 will be on maintaining oversight to ensure the business is delivering good outcomes for its customers which are consistent with the Duty.

Succession planning

The Board remains focused on maintaining good corporate governance and ensuring these principles are embedded into our culture. I strongly believe that diversity in all its forms leads to more productive and balanced Board discussions, and maintaining a diverse and inclusive Board is a key priority. This includes meeting our targets for gender and ethnic diversity, whilst at the same time ensuring that all Board appointments are made on merit.

As I have already mentioned, we are well progressed in our search for two new independent NEDs. It will be important to ensure that our new NEDs receive an appropriate induction, matched to their skills and experience, together with the right level of support from the Board in their first year. We will also be focusing on putting in place succession planning for the Committee Chair roles.

Strategic report

Governance

Financial statements

Other information

Looking ahead

I have really enjoyed my first seven months as AJ Bell's Chair. First impressions are

of a committed, strong management team, collaborative Board and strong performance despite the wider economic backdrop. I truly believe this is a great business and I can see the growth potential. Our dual-channel business model is a real strength in the investment platform market and with a focus on ease of use and value for money, AJ Bell is well-positioned to continue to attract new customers and assets to the platform and further increase our market share.

I am very grateful to the Board and all those in the business who have helped me over the first few months as part of my induction and I am very much looking forward to continuing to work with them over the coming years.

AJ Bell is a financially strong business as evidenced by a profitable, well-capitalised and highly cash-generative business model, and the Board remains confident in the long-term prospects of the business. Whilst the macroeconomic environment remains challenging in the short term, it is clear that the fundamental growth drivers for the platform market remain firmly in place and I look forward to working with Michael, the executive team and the Board to ensure the business takes advantage of the growth opportunities that lie ahead.

Fiona Clutterbuck

Chair

6 December 2023

08 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 09

Chief Executive Officer's review

A scalable platform for growth

Overview

Strategic report

Governance

Financial statements

Other information

Q&A

with Michael Summersgill

We are in a great position to maintain our growth momentum and capitalise on the significant long-term opportunities in our market by providing investors with an easy-to-use,low-cost platform, supported by excellent customer service."

Michael Summersgill

Chief Executive Officer

We are pleased to report another strong set of results for 2023, delivering organic growth in customer numbers, AUA and AUM, across both the advised and D2C market segments. This growth, alongside a record financial performance, demonstrates the strength of our dual-channel platform and diversified revenue model to deliver in different market conditions.

In the five years since our IPO in December 2018 we have delivered

the significant growth that was expected, increasing our share of the fast-growing platform market each year, whilst also paying an increasing ordinary dividend to shareholders. Our focus on providing great value through our high-quality products has led to nearly half a million platform customers now trusting us with their investments.

The investment platform market continues to grow. Whilst we are winning new business from our competitors within the platform market, crucially we are still growing the platform market by attracting assets held off-platform in legacy products, as investors seek the flexibility and control that platforms offer.

This growth is set to continue with approximately two-thirds of the estimated £3 trillion addressable market currently held off-platform.

Our dual-channel model, serving both the advised and D2C segments of the market, enables us to capture assets across the whole addressable market, whilst the benefits of our scale, coupled with our efficient operating model, enable us to keep costs low for customers and invest in our platform with a focus on ease of use. Together with our market-leading customer service levels, these factors have been key to our success to date and ensure we are positioned at the forefront of the platform market to capitalise on the significant long-term growth opportunities.

Our platform provides customers with the flexibility to choose from a broad range of investment options, enabling them to respond to changing market dynamics."

The current macroeconomic environment has presented challenges for investors and advisers, with high inflation leading to higher interest rates. These conditions have impacted consumer confidence and led to stronger demand for cash savings products. We expect these conditions

to persist in the short term, however the versatility of our open-architecture platform enables us to continue to grow across a range of market conditions, as demonstrated in recent years.

Our platform provides customers with the flexibility to choose from a broad range of investment options, enabling them to respond to changing market dynamics. In the higher interest rate environment, we have seen increased demand for government bonds and money market funds. Separately, our Cash savings hub has provided a convenient option for customers seeking higher returns on their cash savings.

Platform customers

476,532

+12%

Platform AUA

£70.9bn

+11%

Q It has now been five years since AJ Bell's IPO. How do you reflect on this time?

We have achieved significant organic growth in customers and AUA, in line with the strategy set out to investors at the time of the IPO. Over this period, platform AUA has increased by 84% to £70.9 billion and platform customers have risen by 160% to 476,532. This growth has been organic and hasn't required shareholder capital, in fact we have paid £147.5 million in dividends since the IPO.

Key to this growth has been investing in our platform propositions whilst consistently delivering excellent service to our customers, as reflected by our recognition as the Which? Recommended Investment Platform provider for five consecutive years and our market-leading Trustpilot score of 4.8-stars.

This service would not be possible without the dedication of our people. Culture and employee engagement have always been key strengths of the business, and we have maintained this as we continued to grow, achieving a 3-star accreditation in the Best Companies to Work For survey every year since we listed.

Looking ahead to the next five years, I am confident we will deliver on the significant growth opportunities our market continues to present.

Q How will your platform products drive growth?

I expect AJ Bell and Investcentre, our well-establishedfull-service platform propositions, to continue to be the core drivers of growth. Alongside this, our new simplified products represent a key area of our growth strategy. Dodl, our simplified D2C platform proposition, is aimed at less-experienced investors. Given the success we have seen on our D2C brand work in 2023, we have decided to revitalise Dodl in FY24, so that it is brought much closer to our core AJ Bell branding and delivers an optimised marketing approach. We are confident in the high-quality customer outcomes the product delivers and this change will help to maximise future growth.

We continue to develop Touch, our simplified advised product. This will expand our offering for advisers, helping them to cater for clients looking for a digital service model. We completed a closed beta launch in the year and plan to deliver the initial proposition to market during 2024.

Q How will you maintain a strong culture?

Maintaining a strong, purpose-led culture is key for me. Our guiding principles are an important tool in fostering the right culture, having been first established around 10 years ago. We have revisited them this year to ensure they continue to reflect who we are as a business. This involved stakeholder engagement which highlighted how deep-rooted our guiding principles are. We have made some changes which are a refinement of the existing framework that has served us well, rather than a fundamental change. These refreshed guiding principles have been embraced by our people who continue to apply them in their roles each day.

Employee share ownership is ingrained in our culture, ensuring staff share in the success of the business. The introduction of our annual all-employee free share scheme will facilitate a continuation of this culture, with the first awards having been made in January 2023.

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AJ Bell plc Annual Report and Financial Statements 2023 11

Chief Executive Officer's review

Strong performance

Strategic report

Governance

Financial statements

Other information

Our platform delivered growth of over 50,000 customers in the year, increasing total platform customers by 12% to 476,532 (FY22: 425,652). Our low-cost products position us well at a time when customers are increasingly looking for value. Demand has been strong from D2C customers, supported by the investments in our brand and improved mobile app functionality. We maintained our excellent service levels throughout this period, as evidenced by our high customer retention rate of 95.2% (FY22: 95.5%).

The strength of our open-architecture platform, offering customers a wide range of investment options, was demonstrated as we delivered over £4 billion of net inflows. This contributed to an 11% increase in platform AUA which ended the year at £70.9 billion (FY22: £64.1 billion). Our investments business achieved another year of significant growth, with total AUM increasing by 68% to £4.7 billion (FY22: £2.8 billion).

The strong demand has been fuelled by our excellent long-term investment performance, with all six of our multi-asset growth funds being placed in the top quartile of returns when compared to their Investment Association peers over the last five years.

Our diversified revenue model has enabled us to deliver a record financial performance whilst also investing in long-term initiatives to support future growth. Revenue increased by 33% to £218.2 million (FY22: £163.8 million), largely driven by growth in platform AUA and higher rates of interest generated on cash balances held on the platform.

We have been mindful of the need to share the benefits of higher revenue margins across all our stakeholders. For customers we have kept our prices low, paid a competitive interest rate on their cash balances and invested in our propositions; for our people we have improved our pay and benefits package in response

to the rising cost of living; and for our shareholders our investments in brand and propositions position us to continue to increase our market share, whilst once again increasing our ordinary dividend.

Business update

Advised

Advised customers

159,256 +10%

Advised AUA

£48.2bn +8%

Our advised business has performed resiliently during a challenging period for the market, delivering a 13,885 increase in customer numbers and £3.4 billion increase in AUA. This increase was driven by net AUA inflows of £1.9 billion (FY22: £3.3 billion)

and £1.5 billion of favourable market movements (FY22: £4.3 billion of adverse market movements). Net AUA inflows were 42% lower than prior year as a result of a moderation in transfer activity as advisers and their clients exercised more caution in the face

of ongoing uncertainty in the macroeconomic environment.

We have continued to develop our full-service advised proposition, Investcentre, with a focus on ease of use. This included new dealing functionality which allows advisers to make one-off investments using their customers' model portfolio asset allocation, helping to avoid any unnecessary friction when adding money to portfolios. We have also made significant progress on enhancements to the onboarding journey, due to be rolled out in the first half of FY24, delivering an improved interface mapped to the advice process which streamlines the new business process for advisers.

In the higher interest environment a number of customers are looking for cash-like returns, whilst maintaining the benefits of remaining in their existing tax wrappers and having the flexibility to easily invest in other assets again at a time of their choosing. To support advisers in servicing those customers, we launched the AJ Bell Investments Money Market MPS in November.

This product is at a market-leadinglow-price with no management fees and an ongoing charges figure (OCF) of just 10bps.

We engage with advisers through a range of events and technical support every year. We continued our 'on and off the road' seminars, and hosted our flagship Investival conference in November, which was attended by over 400 financial professionals. This regular communication with advisers allows us to forge strong relationships and earn their trust as a platform provider.

D2C

D2C customers

317,276 +13%

D2C AUA

£22.7bn +18%

Our D2C business has delivered a strong performance, with a 36,995 increase in customer numbers and a £3.4 billion increase in AUA. This increase was driven by net inflows of £2.3 billion (FY22: £2.5 billion), with over 95% of these net inflows into tax-wrappers and dealing accounts, and £1.1 billion of favourable market movements (FY22: £2.7 billion of adverse market movements).

At the start of the year we retired the Youinvest sub-brand, renaming our full-service D2C platform as AJ Bell. This change has helped to drive the strong growth in the year by simplifying the journey for new customers, and improving the effectiveness of our direct marketing activity.

We have continued to focus on making the customer journey easier and have rolled out multiple enhancements to the AJ Bell platform. In November, we introduced the ability to purchase a select list of gilts online in response to increased demand for those instruments in the higher- interest-rate environment. We also delivered our pension finder service

for new and existing customers.

Following the increases in the UK base rate throughout the year, we raised the rates we pay to customers on cash held

on the platform. Early in 2024, we will be introducing a higher interest rate on cash held in SIPP drawdown, reflecting the fact that these customers often hold more of their portfolio in cash to fund their

short-to-medium term retirement plans, as well as higher rates for SIPP and ISA customers with large cash balances.

We provide high-quality investment content for our D2C customers, covering the latest market trends. In May, we made our weekly Shares magazine free for all D2C customers, and our weekly Money

• Markets and Money Matters podcasts provide further market information and expert analysis to support our customers in navigating their investment decisions.

Investments

AUM

£4.7bn+68%

Our investments business offers a range of simple, transparent investment solutions at a low cost. In a market where many asset managers are suffering persistent net outflows, the strong performance and low-cost nature of our multi-asset investment solutions continue to attract new assets in both the advised and

D2C markets.

The growth has been particularly strong from advised and external platform customers who value the long-term track record of performance our investments have delivered.

Customer services and technology

We provide a high-quality service to our customers, with over 95% of customer calls in the year answered within 20 seconds. This excellent service is reflected in our 4.8-star Trustpilot score, as rated by our D2C customers, and our 95.2% platform customer retention rate.

We continue to invest in our technology to deliver a great customer experience. Our secure and scalable platform has been designed to facilitate growth and drive operational gearing, utilising a hybrid technology model which allows us to build adaptable, easy-to-use interfaces. During the year, we have continued to invest in the resilience of our platform through further investment in our cyber security and disaster recovery capabilities. In addition, we have increased the resource in the change teams in order to improve the speed at which we deliver further enhancements to our platform propositions.

We recognise the significant opportunities that artificial intelligence presents for us to increase our efficiency as a business as well as the risks it presents for customer security. In June, we dedicated engineering and business resources to execute an artificial intelligence hackathon, building several innovative proofs of concepts.

The output of this process was very encouraging, with lots of initiatives discussed and many ideas generated which we will consider adopting in the future. We will embrace artificial intelligence, with the focus initially on internal, non-customer-facing operations, as part of our efforts to continually improve operational efficiency.

People and culture

As our business continues to grow, it is important that we maintain a strong culture, along with our high levels of staff engagement and wellbeing. It is therefore pleasing to have once again achieved

a 3-star accreditation in the 'Best Companies to Work For', and to be recognised as one of the top 20 large companies to work for in the UK.

At the start of FY23 we introduced several enhancements to our pay and benefits package, representing an increase in staff costs of over 10%, including our new free share award scheme for all employees. We remained mindful of the impact of the continuing cost-of-living pressures on our people when considering employee benefits for the forthcoming year. A number of additional enhancements to our pay and benefits package were made, including an average increase in base pay of 5.8% and a further uplift in pension contributions.

As part of our review of the AJ Bell Way, we have refreshed some of our guiding principles and relaunched these to staff across the business, further details of which can be found in our Responsible Employer section on page 39.

Our apprenticeship programmes continue to be a huge success, with this year's intake of 34 new digital and investment apprentices being the largest cohort since it was launched in 2017. We were also pleased to have been recognised as the 'Large Employer of the Year' at the North West Apprenticeship Awards. In addition, our commitment to developing our internal talent pipeline was recognised with an 'Outstanding' Ofsted rating following their inspection of our Talent Development Programme which upskills and develops our Team Leaders and Managers through apprenticeships.

We launched the AJ Bell Futures Foundation at the start of the year to develop long-term partnerships with our local communities. It has been great to see staff participating in volunteering activities with both of our partner charities, Smart Works and IntoUniversity, as well as taking up the chance to nominate local charities for donations. Further information on the work of the Foundation can be found in our Responsible Business report on page 45.

12 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 13

Chief Executive Officer's review

Strategic report

Governance

Financial statements

Other information

Investing for long-term growth

We continue to innovate and invest in our products with a focus on ease of use.

A significant proportion of our addressable market sits in legacy pension products. Most adults have several employers during their career, and subsequently accumulate a number of different pension pots which can be inefficient to manage separetely. Our free pension finding service, which is now live for new and existing customers, has proved popular with customers trying to track down and consolidate pension pots. In FY24, we will launch our new ready-made pension product that consolidates a customer's pension into

a simple product, offering an investment range of four AJ Bell growth funds with a transparent all-in charging structure starting from 45bps. The streamlined nature of this product will reduce barriers for customers who are less confident in managing their own investments and provides an enhanced journey for new customers opening a pension with us

in the future.

Our product philosophy of utilising our scale to keep charges low for our customers ensures we continue to provide excellent value for money. We reduced a number of charges across our full-service propositions in the second half of FY22 and are committed to continually reviewing our customer charges

as we grow.

Trust and brand awareness are key drivers of a new customer's decision when choosing an investment platform. We have built a brand which is highly trusted by our customers, and this year, we commenced our multi-year strategy to enhance brand awareness and to continue increasing our share of the growing platform market. This strategy was kick-started with our 'feel good, investing' multi-channel advertising campaign, alongside our new five-year partnership as the title sponsor of the Great Run Series.

Regulatory developments

There are a number of ongoing regulatory developments that will impact customers in our market and we continue to engage proactively with Government and regulators on their behalf.

We were well prepared for the implementation of the new Consumer Duty which came into force at the end of July. We are supportive of this development and believe it will be positive for consumers, with an increased focus on value for money and ensuring good customer outcomes.

It is disappointing the new Duty does not yet apply to legacy schemes, as the FCA has recently stated savers in older schemes may be at greatest risk of poor value

for money.

We are continuing to work with the Government and the FCA on their review of the boundary between advice and guidance, and their exploration of new ways to offer support and guidance to consumers. We believe any new rules should be applicable to new and existing D2C customers and enable firms to deliver solutions that meet the needs of their customer cohorts. An overly prescriptive approach would stifle innovation and risk poor customer outcomes.

ISAs should be a simple, easy-to-usetax-efficient savings vehicle but we now have six variations of ISAs, all aiming to cater for slightly different customer needs, with complicated rules.

We have been campaigning for the Government to simplify ISAs by creating a single ISA solution that is easy for consumers to understand and will encourage them to invest more. Whilst some relaxations were announced in the Autumn Statement such as allowing people to subscribe to more than one of the same type of ISA each year, we think this was a missed opportunity to launch a wider consultation with the aim of simplifying ISAs and helping people

to invest. Whilst significant change may take some time to achieve, our proposals have been received well both by government and the industry, so we will continue to campaign for further change in this area.

Executive Committee changes

Bruce Robinson stepped down from his role as Company Secretary and Group Legal Services Director, and as a member of the Executive Committee, at the end of September 2023. I would like to thank Bruce for his exceptional service over the last 11 years at AJ Bell and look forward to continuing to work with him in his new role as an Executive Consultant.

Following this, I am pleased to report the internal promotion of Kina Sinclair to the role of Group Legal Services Director and as a member of the Executive Committee with effect from 1 October 2023. Kina joined AJ Bell in July 2018 and brings extensive knowledge of the business alongside her broad commercial law expertise.

As part of the succession plan for Bruce, we have separated the Company Secretary role and are pleased to announce the appointment of Olubunmi Likinyo as Company Secretary with effect from

1 October 2023.

Following the year end Kevin Doran, Managing Director of D2C and Investments, informed the business of his decision to leave. He will therefore be departing AJ Bell in the new year. Kevin has helped us to build a terrific investment business and I would particularly like to thank him for his work in this part of the business. I am pleased to announce that Charlie Musson, our Chief Communications Officer, has taken over as Acting Managing Director D2C. Having worked with Charlie for many years, I look forward to working with him in his new role as we continue to drive our D2C platform propositions

Outlook

Investment platforms play a hugely important role in helping individuals to take control of their long-term investments. At AJ Bell, we operate a scalable platform that provides a high- quality, trusted service to our customers. Our continued investment in our advised and D2C platform propositions means we are well equipped and ready to serve both existing platform customers and new customers seeking to invest in the future.

In the short term, the macroeconomic environment will continue to present some headwinds. However, as we have seen this year, our versatile platform offering enables us to continue delivering robust growth in these conditions and the long-term structural drivers of growth

in the UK platform market remain strong. Our aim remains to continue increasing our share of the platform market, which for many years has grown quicker than the broader financial services sector.

Our diversified revenue model means we are well placed to succeed in different macroeconomic conditions. Our philosophy remains to continually re-invest the benefits of our scale to drive long-term growth, ensuring that we offer a great value proposition to customers whilst investing in our brand, technology and people at the levels required to deliver on our long-term growth ambitions.

As a final point, I would like to thank all of our staff; without their ongoing commitment and quality of work our continued success would not be possible.

Michael Summersgill

Chief Executive Officer

As we have seen this year, our versatile platform offering enables us to continue to deliver robust growth in these conditions and the long-term structural drivers of growth in the UK platform market remain strong."

Why invest in AJ Bell?

forward.

6 December 2023

	Our market	Our propositions	Our customers
See our investement case at	A significant market	Award-winning	A growing base of
ajbell.co.uk/group/investor-	opportunity	advised and D2C	loyal high-quality
relations/investment-case
	platform	customers
	£3tn	95.2%	50,813
	Total addressable market	Customer retention rate	Net new customers in 2023

Our people	Our business model	Quality of earnings	Cash generation
Highly engaged staff	A profitable and	A diversified mix	Highly cash generative
providing excellent	scalable platform	of revenue types	with a progressive
service			dividend policy
Top 20	40.2%	£218.2m	19 years
Best Companies ranking	2023 PBT margin	2023 total revenue	of successive ordinary
			dividend growth

14 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 15

Market overview

Well-positioned to capture growth opportunities

Addressable market

Strategic report

Governance

Financial statements

Other information

Long-term structural growth drivers

The UK investment platform market forms part of the broader UK savings and

The total addressable market for platforms is currently estimated to be worth approximately £3 trillion. With only one-third of this currently held on platforms there is a

The long-term drivers that are shaping our industry and driving new growth opportunities.

investment industry. Across the industry, trillions of pounds of assets are held by individuals in products such as pensions, ISAs, general investment accounts, bonds and cash savings.

Historically, most individuals in the UK held their savings and investments in products offered by banks, building societies, investment managers, pension schemes, stockbrokers and life insurance companies. A significant proportion of the overall market continues to be held off-platform.

significant long-term growth opportunity for investment platforms.

UK platform market

The platform market is currently worth close to £1 trillion, with around two-thirds held on adviser platforms and the remainder held on D2C platforms.

The market has grown significantly over the last decade, with total AUA having trebled from £0.3 trillion in 2012. The advised and D2C segments of the market have both grown at similar rates during that period, driven by long-term structural growth drivers and an overriding theme of individuals taking greater

Demographics

UK state pension age is due to reach 67 by 2028

The UK's ageing population and increased life expectancy have led to an increase in state retirement age, causing people wishing to retire earlier to be increasingly reliant on their private pensions and savings. This is driving people to be more actively engaged with their savings and investments from an earlier age.

Technology

Structural shift from non-platform providers to platforms

Technological innovation has made the investment platform market more accessible to a broader range of retail investors who are increasingly looking for simple, intuitive products to help them achieve their long-term financial goals.

Investment platforms are increasingly attracting assets previously held in legacy products, driven by the improved customer outcomes they can deliver such as the ability to manage investments easily in one place, increased flexibility

personal responsibility for their financial futures.

AJ Bell is one of only a few platforms operating at scale in both the advised and D2C market segments. Our dual-channel

Government policy

Financial

and investment choice, and often lower charges. As a result, there is an established trend of non-platform assets gradually moving into the platform market. This trend is expected

to continue.

business model ensures that we are positioned to capture assets from the whole addressable market, irrespective of whether they are self-managed or using the support of a financial adviser. This maximises our opportunity to capture an increasing share of the assets flowing into the platform market, driving further market share gains over the long term.

The workplace pension participation rate in the UK has increased from 47% to 79% since 2012

There is an increasing requirement for individuals to take greater personal responsibility for their retirement provision, evidenced by the UK Government's policies in relation to pension freedoms, auto-enrolment and tax-efficient savings and investments.

There are over 29 million members of private-sector DC pensions in the UK

There is a growing awareness of the UK savings gap, being the difference between the level of current savings and that necessary to provide a reasonable standard of living in retirement, and the impact of the shift away from defined benefit to defined contribution pension schemes.

A fast-growing platform market
£bn					+11%
					CAGR				986
									317	912
								800		287
							763
						716
					693	233	246
						224
					205
				570				669
								625
		434	473	170			530	554
		145		488	492
	363	132
		400
308
117
		329
94		302
214	247
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Advised AUA	D2C AUA		Source: Platforum UK Adviser Platforms (November 2022); Platforum UK D2C Market Overview (February 2023).

AJ Bell's market share													6.9	7.2
%																	6.7
												6.4	6.5
																6.2
												6.1
																5.5
										5.0			4.8
								4.7
		4.4			4.5
		4.3
3.9											3.9
										3.2
								2.8
						2.3
		1.5	1.8
1.3
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
	Advised			D2C

16 AJ Bell plc Annual Report and Financial Statements 2023

AJ Bell plc Annual Report and Financial Statements 2023 17