Building
on strong
relationships
Annual Report 2024
At a glance
Our business
“Compared to other
providers I have
previously used, I find
Transact to be
excellent and a
superior service.”
Transact client
“Every time I wish to do
something (...) your
staff are very efficient
and professional. I am
always impressed.”
Financial adviser
“I have been an adviser
recommending Transact
from its inception and
always found it to be the
premier platform. I like
the way it continually
adds tools and improves
the platform.”
Financial adviser
£64.1bn
Funds under direction
234,998
Platform clients
8,048
Advisers registered
on platform
Our aim
Our aim is to be the number one provider of
software and services for clients and UK
financial advisers.
Our purpose
Our purpose is to make financial planning easier.
Our strategy
Our strategy is to deliver leading financial
adviser software, personal service and
value for money.
Our values
Our key value is to always do the right thing.
Transact is an award-winning investment platform offering our clients
and UK financial advisers smart technology, unrivalled support and
exceptional service for a modern, efficient way to manage client
investment portfolios.
We provide a wide range of financial planning tools and comprehensive
reporting, alongside an extensive range of investments and tax efficient
wrappers to make the management of portfolios as easy and efficient
as possible.
The goal of T4A is to enable UK financial advice firms to efficiently and
durably grow. This is achieved by supporting these firms to effectively
deliver and record financial plans for their saving and investment clients.
T4A provides best-in-class Microsoft-based client relationship
management (CRM) software to UK financial advice firms. The CRM
software is focused on delivering comprehensive functionality, leading
integrations with Microsoft Office and third-party financial services
tools and superior access to data.
Revenue breakdown
Transact – 97%
Time4Advice – 3%
Highlights
Contents
Strategic report
IFC
At a glance
IFC
Our business
1
Highlights
2
Chair’s statement
4
Chief Executive Officer’s statement
7
Market overview
8
Business model
10
Strategy
12
Key performance indicators
14
Stakeholder engagement
20
Section 172 statement
22
Responsible business
33
Task Force on Climate-related Financial Disclosures (TCFD)
38
Financial review
43
Risk management
45
Principal risks and uncertainties
48
Emerging risks and changes to the risk landscape
49
Going concern and viability statement
50
Non-financial and sustainability information statement
Corporate governance
52
Chair’s introduction
53
Governance dashboard
54
Board of directors
56
The role of the board and its responsibilities
57
Key board activities during the year
58
Composition, succession and evaluation
60
Audit and Risk Committee report
65
Nomination Committee report
68
Directors’ remuneration report
95
Directors’ report
98
Statement of directors’ responsibilities
Financial statements
100
Independent auditor’s report
107
Consolidated statement of comprehensive income
108
Consolidated statement of financial position
109
Company statement of financial position
110
Consolidated statement of cash flows
111
Company statement of cash flows
112
Consolidated statement of changes in equity
113
Company statement of changes in equity
114
Notes to the financial statements
Other information
147
Directors, Company details, advisers
148
Glossary of terms
149
Glossary of alternative performance measures (APMs)
B
Learn more about IntegraFin at
www.integrafin.co.uk
Operational highlights
Year-end closing funds under direction (FUD)*
£64.1bn
+17%
(2023: £55.0bn)
Average daily FUD*
£59.6bn
+11%
(2023: £53.6bn)
Net inflows*
£2.5bn
-7%
(2023: £2.7bn)
Platform clients*
234,998
+2%
(2023: 230,294)
Client retention*
94%
-1%
(2023: 95%)
Advisers registered on the platform*
8,048
+5%
(2023: 7,683)
Financial highlights
Revenue
£144.9m
+7%
(2023: £134.9m)
Reported profit before tax (PBT)
£68.9m
+10%
(2023: £62.6m)
Underlying PBT*
£70.6m
+12%
(2023: £63.0m)
Reported earnings per share (EPS)
1
15.7p
+4%
(2023: 15.1p)
Underlying EPS*
1
16.2p
+7%
(2023: 15.2p)
*
Alternative performance measures (APMs).
APMs are financial measures which are not defined by IFRS.
These have been indicated with an asterisk. They are used to
provide better insight into the performance of the Group.
Further details are provided in the glossary on pages 149-151.
1
Unless otherwise noted, ‘Reported EPS’ and ‘Underlying EPS’ refer
to ‘Reported diluted earnings per share’ and ‘Underlying diluted
earnings per share’, respectively.
Strategic report
Corporate governance
Financial statements
Other information
1
IntegraFin
Annual Report 2024
Chair’s statement
Putting clients first
“IHP is resolutely
focused on making
financial planning
easier. The shared
commitment our
employees
demonstrate to
putting our clients
first is instrumental
to our success.”
Richard Cranfield
Chair
Overview
I am pleased to introduce this year’s Annual
Report. IntegraFin Holdings plc Group (IHP or
the ‘Group’) has delivered strong performance
throughout FY24, with our investment
platform, Transact, growing FUD to a record
high of £64.1 billion as at 30 September 2024.
We remain focused on our underlying aim:
to be the number one provider of software
and services for clients and UK financial
advisers. We have pursued this by maintaining
best-in-class service levels and expanding
the functionality of our investment platform.
Industry surveys continue to show Transact
as the highest ranked for client service and
functionality amongst platforms with over
£30 billion in assets.
This has resulted in net flows onto the
platform of £2.5 billion, representing robust
performance relative to the market, and
growing our market share of net flows to
c.25%. Over the financial year, advisers
registered on the platform increased by 5% and
client numbers by 2%. Time4Advice (T4A)
continues to develop its CURO on Power
Platform offering, which has seen it work
effectively for c.400 users following its pilot
with a major customer. Further rollout to
existing and new clients will commence in the
new financial year.
Our financial and operational performance
has been solid, and our people have been
instrumental in delivering a high-quality
service. Alexander Scott comments on the
results in more detail in his Chief Executive
Officer’s (CEO) Statement.
Developing our business
The digitalisation of the Transact platform
continues, with the vast majority of instructions
being completed online. The emphasis has now
moved to our integrations programme, enabling
a greater level of system-to-system connectivity
across data, documentation and instructions.
Further detail on our digitalisation strategy can
be found in the Strategy and Business Model
sections of this report on pages 8 to 11.
Sustainability and social issues, including
diversity, equity and inclusion, are a growing
focus for our business. Our first cohort of
interns with the 10,000 Black Interns
programme started in summer 2024 and all
parties enjoyed the experience and look forward
to repeating it again next year. We have also
recently launched the RISE work experience
programme, partnering with Kingston University,
focusing on underprivileged students.
Strategic report
Corporate governance
Financial statements
Other information
2
IntegraFin
Annual Report 2024
We have continued development of our
sustainability strategy, led by Victoria
Cochrane in her role as Designated Non-
Executive Director for Environmental and
Social Sustainability (ESS).
Highlights for the year include setting up a
Sustainability Forum across the Group and
increasing employee engagement on
sustainability matters. Importantly, we have
focused on improving the quality of Scope 3
data in order to set targets for emissions, and
MSCI has released an updated ESG report for
the Group upgrading the rating from BBB to A.
Supporting our people
This year saw our third annual engagement
survey completed, with an increased
participation. The results of this survey were
encouraging, especially our progress in the
areas of staff communication, workplace
technology and remuneration. We were also
pleased to receive accreditation from Women
in Finance during the year, affirming our
continued support for the progression of
women into senior roles in financial services.
Additionally, we developed our staff bonus
scheme to greater reflect performance.
The IHP board
Euan Marshall joined as Group Chief
Financial Officer (CFO) in January 2024; his
background and experience have brought a
valuable new perspective to our operational
and strategic approach.
We announced earlier in the year that
Christopher Munro, who had been a
non-executive director on various Group
boards since 2017, was to step down from the
board of the Company at the end of September
2024; however, sadly he has had some serious
health issues, which meant he accelerated his
plans and retired as a director in July 2024.
We are grateful for his input and expertise
over the last seven years.
Jonathan Gunby, who joined the board when
he became Transact CEO in January 2020,
left the board in September 2024, whilst
maintaining his full-time executive role as the
Transact CEO. I’d like to thank Jonathan for his
contribution to the board.
With Christopher Munro stepping down from
the board, the Nomination Committee has
undertaken a search for a new non-executive
director. The committee will be recommending
the appointment of a new non-executive
director in due course.
Governance and culture
The UK Corporate Governance Code (the
‘Code’) applies to the Company; confirmation
of how we have complied with the Code for the
year under review is set out on page 52. From
FY27, the new Code will apply to IntegraFin, and
work is underway to ensure that the Company
is prepared for the changes. The new UK
Listing Rules came into effect on 7 July 2024
and whilst the impact on the Company is small,
the board has been apprised of its obligations.
We take great care of our corporate culture
and values, which are reflected both in our
employee relations and in our interactions with
clients, advisers and other key stakeholders.
We believe our culture of putting clients first
has been central to our compliance with the
Consumer Duty. It is pleasing that we
continue to rank so highly in adviser service
research undertaken by Investment Trends
and CoreData.
Following the publication of our FY23 results
in December 2023 and FY24 interim results
in May 2024, our Company Secretary,
Helen Wakeford, and I offered meetings with
our largest shareholders. We held 11 meetings
with our largest investors, including six
investors that we met twice. The meetings
gave shareholders the opportunity to discuss
topics of concern which we felt were
constructive and transparent. We plan
to continue open engagement with our
stakeholders outside the boardroom and this
forms a critical aspect of board-level activity.
We have rigorous Audit and Risk, Nomination
and Remuneration Committees, which meet
regularly to review and challenge in depth the
work of the executive. This year we are
recommending a new Remuneration Policy to
our shareholders, details of which can be found
in the Directors’ Remuneration Report. In
connection with that, we offered our top 15
shareholders, plus several others who had
previously expressed interest, the opportunity
to preview our overall planned approach by
meeting with Rita Dhut as interim
Remuneration Chair, Helen Wakeford
and myself over the summer.
The Nomination Committee continues to
oversee the composition of the boards and the
pipeline of talent within the business, both to
assure the quality of the succession into senior
roles, and to support the delivery of our
Diversity, Equity and Inclusion Policy.
Full
information on diversity at the board level can
be found in the Nomination Committee Report
on page 67.
Further detail on the activities of the Audit and
Risk and Nomination Committees can be
found in their respective reports.
On pages 20 and 21, we present our Section
172 (s.172) Statement, which sets out how we
consider our key stakeholders in our decision
making and the key decisions we have made
throughout the financial year.
Remuneration
The Directors’ Remuneration Report is set out
on pages 68 to 94.
As part of the normal
3-year cycle, we present a new Remuneration
Policy which includes a new Combined
Incentive Plan, with tighter pre-determined
financial and non-financial measures and
targets against our four anchors, including a
significant portion on PBT, as well as increased
deferral, a further 3-year underpin and holding
periods, all as detailed in the Directors’
Remuneration Report.
We feel this balances a
strong performance driven incentive for senior
executives with the interests of shareholders
and other stakeholders.
We recommend
shareholders to support this.
Dividend
In recognition of our financial performance, we
have declared a second interim dividend of 7.2
pence per Ordinary Share. Together with our
first interim dividend paid in June of 3.2 pence
per Ordinary Share, this takes the total dividend
to 10.4 pence per Ordinary Share.
Closing
I continue to remain enormously impressed by
the professionalism and dedication of our
employees. The shared commitment to putting
our clients first is a core part of our DNA and
differentiates us in the platform market.
The members of the board would again like to
thank all our colleagues for the hard work that
they have put in over the last financial year.
These results, the published satisfaction
surveys and our ranking within the platform
sector are the product of their efforts.
Richard Cranfield
Chair
17 December 2024
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Corporate governance
Financial statements
Other information
3
IntegraFin
Annual Report 2024
Chief Executive Officer’s statement
Delivering growth
across the business
Overview
I am pleased to report another year of strong
financial and operational performance by the
Group. We have achieved robust growth in
our key metrics: client and adviser numbers,
revenue and underlying PBT. Progress in
these measures was supported by an
increase in average daily FUD, driven by our
net inflows and rising markets. The Group’s
value proposition continues to deliver
positive outcomes for our clients, their
financial advisers and our shareholders.
In the first half of our financial year, equity
markets performed well with a beneficial
impact on our FUD levels. However, across
the industry, investment funds and adviser
platforms alike experienced heightened
outflows, continuing the trend seen towards
the end of FY23. Nevertheless, Transact
attracted among the highest net flows in
the industry.
The second half of the year saw more
moderate market movements and the first
Bank of England interest rate cut since 2020.
Net inflows also showed signs of growth
compared to H1, with higher inflows and an
improving macroeconomic picture as the
financial year progressed, boosting flows.
T4A has also delivered over the year,
increasing the number of CURO licence users
and making progress with the development
and initial rollout of CURO on Power Platform
(CURO PP). However, anticipated financial
performance has been behind the original
expectation, due to complexities in the
development and finalisation of CURO PP.
The combination of our key differentiators
– proprietary technology and industry-
leading, personal customer service – has
again proven effective in allowing us to
capitalise on the opportunities within the
adviser platform market. Our focus remains,
as always, on our purpose: to make financial
planning easier for clients and their UK
financial advisers.
“We have delivered
strong financial
and operational
performance against
an evolving market
backdrop. The quality
of our technology
and service continue
to drive new
business growth.”
Alexander Scott
Chief Executive Officer
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Corporate governance
Financial statements
Other information
4
IntegraFin
Annual Report 2024
Transact platform
performance
Over the financial year, we have continued to
grow the number of advisers and clients on
the Transact platform, with steady increases
throughout the period. Adviser numbers
passed a significant milestone, now standing
at 8,048, and client numbers are at 234,998.
Our quality service remains the cornerstone
of our platform and advisers continue to
recognise this, with Transact winning
multiple industry awards. This is emphasised
further by achieving durable client retention
of 94% for the year.
Gross inflows were strong during the year,
and in Q2 we achieved our highest ever
gross inflows figure for a single quarter
at £2.3 billion. This is a testament to the
ongoing capability of our platform technology
and our industry-leading customer service
which continues to win market share.
Partially offsetting this, gross outflows were
elevated caused by an increase in the value
of one-off withdrawals from the platform.
This was driven by several factors, including
the enduring impact of recent high inflation
driving up nominal living costs and the higher
interest rate environment increasing
payments required on debts such as
mortgages. As the year progressed, we
started to see signs of outflows moderating,
with H2 outflows slightly lower than in H1
FY24. With inflation now close to the Bank of
England’s target, we anticipate that some of
the factors previously driving higher outflows
will start to abate gradually in FY25.
This led to a robust performance in net flows
which were the third highest in the market
over the financial year, representing 25%
of market net flows. Market movements
also provided significant uplift to our FUD,
especially in the first half of the year, helping
us reach closing FUD of £64.1 billion.
This is a new record for closing FUD, 17%
ahead of FY23.
Financial performance
As a result of the increase in average daily FUD
throughout the year, revenue has increased to
£144.9 million, 7% ahead of FY23. At T4A,
revenue was stable, with an improvement in the
revenue mix. We are now generating a greater
proportion of income earned from CURO licence
fees (c.92% compared to c.83% in FY23), a more
sustainable
source of recurring revenue.
Underlying PBT, £70.6 million, and reported
PBT, £68.9 million, have both increased in the
past year, by 12% and 10% respectively. This
has been driven by a combination of higher
revenue and an increase in net interest income
on corporate cash, largely due to higher
interest earned on corporate cash balances.
We also maintained our strong, debt-free
balance sheet.
We remain committed to ensuring value for
our clients and their financial advisers. We
are thus proud that we were able to deliver
record revenue and PBT, while also delivering
value to our clients by removing the buy
commission and wrapper fees for Junior
ISAs within linked family groups.
Transact platform
digitalisation
This year, we have continued our
digitalisation programme, implementing
digital enhancements to online wrapper
application and bulk administration
processes resulting in significant uplift in
online adoption and a reduction in manual
and paper processes. Key pension and ISA
portfolio processes can now be completed
online, with real time data validation. We have
also expanded the implementation of
straight-through processing. This continues
to drive efficiencies for advisers and their
back-office staff, as well as starting to deliver
efficiencies for Transact platform operations.
A benefit of our proprietary platform
technology is that we can maintain a regular
cycle of monthly updates to our functionality.
Every month, we deliver new functionality and
improved efficiency in each update to the
Transact platform. The streamlining of
processes, enabled by these releases, helps
deliver operational efficiency for both staff and
the clients and advisers using the platform.
People
I was delighted to welcome Euan Marshall to
the board in January 2024. Euan brings a
breadth of experience that will be invaluable
in driving and delivering our strategy over the
coming years.
Average headcount was 6% higher during
the year, including further additions to our
IT and software functions. Existing and new
employees have helped to enhance our
service, as well as enabling our program
of platform improvements and digitalisation.
Our high-quality service and platform
enhancements drive our robust net inflows,
delivering organic growth.
The wellbeing of our people remains of
the utmost importance to our business.
We completed our third annual group
engagement survey which indicated that our
employees feel supported and aligned with
our business’ core values. For further detail
of our commitments to our staff, please see
the People and Culture section within
Responsible Business, on pages 26 and 27.
Regulatory and
sustainability matters
We operate in a changing regulatory
environment and FY24 bore witness to
several evolving developments. This was the
first full year in which the FCA’s Consumer
Duty regulation was in force. Consumer Duty
is not a one-off event but rather an ongoing
commitment; as such, we continuously
review our operations to ensure we are
maximising positive consumer outcomes.
We have always prioritised our clients’ needs,
and this value is at the heart of our culture.
In December 2023, the Financial Conduct
Authority (FCA) issued its “Dear CEO” letter
outlining its stance on taking a margin on
client cash and calling on firms to cease the
practice of double-dipping. Our approach to
client cash has always been, and continues to
be, to pass on the full value to our clients, in
accordance with our customer-first principles.
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Other information
5
IntegraFin
Annual Report 2024
Chief Executive Officer’s statement
continued
Outlook
Many of the headwinds that were present
over the past year are showing signs of
abating. Yet uncertainty remains, especially
regarding the new government’s policy
agenda coupled with the impact of potential
US policy changes on geopolitics and the
global markets. The outlook on interest rates
is also ambiguous, with inflation levels in the
UK closer to the Bank of England’s target, but
cautious rhetoric on any further reductions.
As such, we expect to see both the UK and
US central banks slowly reduce interest rates
during the coming year, helping to improve
investor confidence and appetite to invest in
equity markets.
Despite the level of uncertainty, the
opportunities within the UK adviser platform
sector remain strong. The long-term
structural trends within the market look to
provide compelling growth opportunities as
“The structural trends
within the market
provide compelling
growth opportunities
as customers seek to
take greater control
over their financial
wellbeing and long-
term savings
and investments.”
Alexander Scott
Chief Executive Officer
8,048
Advisers registered
on platform
234,998
Platform clients
£64.1bn
Closing FUD
customers seek to take greater control over
their financial wellbeing and long-term savings
and investments. The UK wealth management
sector is expected to continue growing, driven
by government emphasis on retirement
security and an ageing, wealthier UK
population. Consequently, over time, more
investable assets will flow onto platforms.
Meanwhile, the Group’s strength in both
people and technological aspects, leave us
well placed to capitalise on these trends.
The flexibility enabled by our proprietary
technology, our customer-first principles and
personal, high-touch client service continues
to serve the Group well. We continue to target
the development of Application Programming
Interface (API) integrations that will bring the
most benefit to our advisers.
Next year, we will move to a new London
office. We will seek to use this move to bring
further efficiencies to our ways of working
and to advance our sustainability goals, while
also focusing on how changes to the working
environment can benefit our staff.
As always, I would like to thank all my
colleagues across the Group for their
dedication. Their commitment to quality is
essential to our success. I look forward to
continuing to deliver on our principal aim: being
the number one provider of software and
services for clients and UK financial advisers.
Alexander Scott
Chief Executive Officer
17 December 2024
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Financial statements
Other information
6
IntegraFin
Annual Report 2024
Market overview
Uniquely well placed
in a growth market
Market dynamics
The financial adviser community continues to evolve. Based on latest
2023 FCA retail intermediary market data, the number of financial
adviser firms reduced and the average size of adviser firms increased
due to adviser consolidation. T4A has benefited from advice firm
consolidation because its flexible software is particularly attractive
to larger firms. Key consolidator advice firms which are clients of T4A
acquire firms and mandate the use of T4A’s CURO software after
the acquisition.
Over the past 12–18 months, we are beginning to see the FCA’s
Consumer Duty shape the adviser landscape. Advisers have increased
their focus on the provision and documentation of ongoing advice
fees. Private equity consolidators are increasingly factoring in
Consumer Duty to their due diligence process and valuations.
Demand for in-house platforms has reduced but demand for more
integrated adviser technology ecosystems continues to grow.
Transact has benefited from the increasing adviser focus on Consumer
Duty topics such as cash interest, service levels, technology integrations
and value for money. In addition, many advisers are prioritising more
affluent and high net worth customers which aligns well to our platform
differentiators. As a result of these trends, we have seen record numbers
of advisers register to use the Transact platform over the past 12 months.
Macroeconomic conditions
Interest rates and the cost of living continues to impact the level of
client withdrawals from the platform. We have seen an increase in
size of regular withdrawals from pensions and bonds to meet these
higher costs. There has also been an emerging trend of one-off
withdrawals from other wrappers to support younger family members
with large purchases such as houses.
Competitors
The competitive landscape is changing. Many existing competitors, for
example platforms using third party technology vendors, are struggling
to keep pace with adviser demand and regulatory change. We continue
to see new entrants enter platform and back-office markets. In both
segments new entrants have helped technology and process innovation.
This innovation is good for the advisers and customers. We are
embracing innovations around digitalisation and client communications.
Our focus on developing a more integrated, API-enabled technology
ecosystem also aligns to new entrant aspirations.
Market outlook
Our target market, platforms and back-offices used by financial
advice firms, continues to grow. Fundscape, a specialist research
firm, expects the adviser platform market to grow at 13% per annum
from £707 billion at the end of 2024 to £995 billion in 5 years’ time.
These growth rates are underpinned by structural growth drivers.
First, responsibility for retirement savings continues to shift from the
UK Government (state pension) and employers (defined benefit) to
individuals. Second, ongoing tax changes such as the removal of the
Lifetime Allowance continue to drive demand for advice. Further tax
changes can be expected with a new government. Finally, the focus
on Consumer Duty outcomes across products and services, value
for money, consumer understanding and consumer support will
encourage advisers to place more assets on platforms over time.
Target market
Our Group strategy focuses on delivering leading financial adviser
software, personal service and value for money to enable great
financial planning. Both Transact and T4A are committed to the UK
financial adviser community and their shared customers. Transact’s
adviser platform market has grown steadily to £683 billion. We continue
to see advisers transfer legacy life products, discretionary portfolios,
direct to consumer investments and workplace pensions onto the
platform. Meanwhile, T4A’s back-office market remains a critical part
of advice firm technology in a post-Consumer Duty environment.
“Our target market
continues to grow,
with the quality of
technology and
personal service
being important
factors. IHP’s
ongoing focus
on people and
integrations helps us
to further strengthen
our market position.”
Jonathan Gunby
Transact CEO
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Corporate governance
Financial statements
Other information
7
IntegraFin
Annual Report 2024
Business model
Our business model
ignites growth
Proprietary software and high-quality personal service
Making financial
planning easier
Enabling financial advice
firms to grow
Transact’s proposition for clients and UK financial advisers
97%
Revenue
Paid for by clients
3%
Revenue
Paid for by financial
advice firms
Putting
clients
first
Personal service
n
A service model that makes
it easy for advisers to build
long-term relationships with
our people
n
The capacity and capability to
understand advisers and tailor
our services to their needs
n
Ongoing investment in
technology to enable our
people and empower clients
and advisers
n
Access to experienced
technical resources to advise
on complex planning queries
Digital and
integrations
n
A vision around a much more
integrated technology
ecosystem for advisers
n
An intuitive digital experience
which reduces re-keying and
errors for advisers
n
An approach to client consent
which protects and
empowers advisers
n
Proprietary software enables
continuous website and
API improvements
Responsible pricing
n
A business model that
treats new and existing
customers fairly
n
A pricing model that shares
scale and efficiency benefits
with our clients
n
A desire to continuously review
and simplify our pricing
n
An approach which
enables inter-generational
financial planning
Consumer
Duty aligned
n
A proposition leader which
continues to innovate and
stay ahead of new entrants
n
An approach to cash interest
which is fair and transparent
n
A service model which looks
beyond averages to individual
client outcomes
Strategic report
Corporate governance
Financial statements
Other information
8
IntegraFin
Annual Report 2024
3,098
Users
How we generate revenue
Adviser back-office technology 3%
Licence income based on a fixed monthly
charge per number of licenced users,
comprising 92% of total revenue.
Consultancy income is charged based
on the services provided.
What makes us different?
Leading functionality
CURO software supports the entire
financial advice process and enables firms
to leverage the value of their data.
Leading integrations
T4A strategically collaborates with leading
software partners to streamline processes,
eliminate errors and save time through
secure data sharing via Microsoft’s Web
API. Additionally, T4A plans to integrate
CURO with the Transact platform to
enhance efficiency for advice firms using
both solutions.
“CURO is the best
wealth management
CRM and back-office
system out there.”
Managing Partner
Adviser firm
B
Discover more online at
www.time4advice.co.uk
234,998
Clients
8,048
Advisers
How we generate revenue
Annual platform charge 87%
Based on a fixed percentage applied to the
value of a client’s portfolio each month.
Please note that some portfolios can be
linked for discounts.
Wrapper fee income 9%
Based on a fixed quarterly charge for
certain wrappers. Please note Junior
Pension and ISA wrapper charges were
removed from April 2024.
Other revenue 1%
Primarily stockbroker dealing charges
that are passed on to clients.
What makes us different?
Leading functionality and
proprietary software
Tax wrappers, investment solutions,
reporting capability and APIs continually
updated by our experienced in-house
software developers.
Leading service
A leading service model for advisers and
clients covering online, client and technical
queries. Top rated by advisers in various
industry surveys.
Value for money
A Consumer Duty aligned pricing model
with a track record of sharing scale
benefits with clients and simplifying
our charges.
B
Discover more online at
www.transact-online.co.uk
“Excellent service and I have a view of
everything I need and also can produce
my own reports which is fantastic.”
Transact client
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IntegraFin
Annual Report 2024
Strategy
Our strategy
continues
to deliver
growth
The Group’s purpose is to make
financial planning easier for clients and
financial advisers.
Our strategy is to deliver leading financial
adviser software, personal service and value
for money. As a result, our strategy has
three strategic pillars: leading functionality,
leading service and value for money.
Successful delivery of the strategy leads to
a sustainable business allied with positive
financial outcomes, including higher
earnings, a strong balance sheet and high
cash generation. This benefits a broad
range of stakeholders including sharing
the benefits of scale with our clients and
supporting dividends to our shareholders.
Key to principal risks
1
Competition
2
Market
3
Capital
4
Liquidity
5
Service standard failure
6
People
7
Resilience
8
Information security
9
Regulatory
10
Financial crime
1
Leading functionality
The Transact investment platform leads the market on
wrapper choice, client reporting, retirement income
functionality and investment choice for advisers and clients.
We are focusing on enabling adviser firm efficiency and
experience through continuous investment in digitalisation
and developing integrations with adviser tools.
The CURO back-office advice firm technology is designed and
built to support advice firms with the entire advice process,
with the latest version built on Microsoft technology.
FY24 progress
n
Investment platform:
—
Digitalised a range of processes including bulk
appointment of discretionary managers and change
of client details online.
—
Implemented a wide range of additional integration
services including a fee reconciliation API and new bulk
reporting functionality.
n
Back-office technology:
—
During the year a large advice firm client of T4A had been
successfully using CURO on Power Platform (CURO PP).
Additionally, the first successful migration of an existing
large advice firm client to CURO PP was completed.
KPIs
n
Average daily FUD
n
Net inflows
n
Number of platform clients
n
Number of advisers registered on platform
n
CURO licences
FY25 plans
n
Investment platform:
—
Further development of iterative digitalisation of
pension income and family linking processes.
—
Introduction of new integration services including
account opening API and document sharing with third
party systems.
n
Back-office technology:
—
Ongoing rollout of the CURO PP platform.
Principal risks
1
6
10
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IntegraFin
Annual Report 2024
2
Leading service
Our regional service model helps advisers and their support
teams to build long-term relationships with our operational
staff. This helps us to be more responsive, take more
ownership and solve problems faster than other platforms.
FY24 progress
n
Investment platform:
—
Appointment of transfer and technical specialists to
regional teams to improve quality and communication
on complex processes.
—
Iterative development of our transfers-in tracker to
improve the visibility of transfer cases.
n
Back-office technology:
—
Optimising CURO PP service and support.
KPIs
n
Platform client retention rate
FY25 plans
n
Investment platform:
—
Appointment of legal and compliance specialists on
regional teams to improve response time on more
complex queries.
—
Access to live chat for client-specific queries via
regional service teams.
Principal risks
1
5
6
7
8
9
10
3
Value for money
We are competitive on price and lead on value for money,
particularly with the inclusion of interest on client cash where
we have always passed on 100% of interest earned to clients.
Advisers value the sustainability of our pricing, our profitability
and our financial strength. This helps to differentiate us from
unprofitable new entrants as well as many incumbent platforms.
FY24 progress
n
Investment platform:
—
Elimination of buy commission for all clients and
removal of Junior ISA wrapper fee charges, further
simplifying the pricing structure and reducing fees.
—
Maintaining our approach of passing all interest earned
on client cash balances to the client instead of taking
a percentage of this interest.
KPIs
n
Revenue
n
Platform revenue margin
n
PBT margin
n
Profit before tax
n
EPS
FY25 plans
n
Investment platform:
—
Improvement in non-advised support services.
—
Ongoing improvements to management of client cash
interest rates and term deposit providers.
—
Improvement in non-advised support services.
n
Back-office technology:
—
Enhancing efficiency in deployment of the CURO
software to our clients.
Principal risks
1
2
3
4
9
10
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IntegraFin
Annual Report 2024
Key performance indicators
Tracking performance
Our operational and financial KPIs measure the performance of our
business against our strategic objectives. Performance of these KPIs
over the last three financial years is presented in the following charts.
Average daily FUD*
£59.6bn (+11%)
Why this is a KPI
n
The value of assets that are held on the platform.
n
Primary driver of the Group’s revenue as it is the basis of
the ad valorem annual charge.
2024 performance
Increased £6.0 billion (11%) during the year driven by
full-year market movements of £6.6 billion and net inflows
of £2.5 billion.
Strategic pillars
1
Net inows*
£2.5bn (-6%)
Why this is a KPI
n
The value of assets that are transferred or deposited
onto the platform less the value of assets transferred
out or withdrawn from the platform.
n
A core component of FUD growth and also
demonstrates the ongoing appeal of the platform from
advisers and clients and the Group’s ability to continue
to grow organically.
2024 performance
Net inflows of £2.5 billion which equated to 5% of
opening FUD. Against a challenging backdrop of ongoing
macroeconomic headwinds for our clients, where gross
outflows have been elevated, this was a strong performance.
Strategic pillars
1
Platform clients*
234,998 (+2%)
Why this is a KPI
n
T
he number of fee-paying clients with funds on the
platform at period end.
n
A
n indicator of ongoing appeal of the platform
proposition and a key driver of FUD growth and wrapper
fee growth.
2024 performance
The number of clients on the platform has increased by
5k from the previous year. This is a 2% increase and
consistent in absolute terms with the two previous years,
demonstrating Transact’s ability to continue to attract
new clients.
Strategic pillars
1
Platform client
retention*
94% (-1%)
Why this is a KPI
n
The number of clients who have left the platform during
the period divided by the number on the platform at the
start of the period.
n
An important measure of client satisfaction. It is also a
driver of ongoing revenue, and we attribute our strong
client retention levels to satisfaction with our service
and offering.
2024 performance
Client retention declined by 1% from the previous year. In a
market with elevated transfers, this represents strong
performance and reflects the platform’s quality.
Strategic pillars
2
Advisers registered
on the platform*
8,048 (+5%)
Why this is a KPI
n
FCA-registered advisers using the Transact platform.
n
Ongoing penetration of this channel provides the basis
for future client and FUD growth.
2024 performance
Our adviser numbers rose by 5%, an increase of 365. This is
larger than last year’s increase in both percentage and
absolute terms, indicating a strong pipeline for future flows.
Strategic pillars
1
OPERATIONAL
£53.6bn
2024
2023
£59.6bn
£52.5bn
2022
*
Our KPIs include alternative performance measures (APMs) which are indicated with an asterisk. APMs are financial measures which are not defined by IFRS.
2024
2023
£2.7bn
£2.5bn
£4.4bn
2022
2024
2023
8,048
7,537
7,683
2022
2024
2023
230,294
234,998
224,705
2022
2024
2023
95%
94%
97%
2022
Strategic pillars
1
Leading functionality
2
Leading service
3
Value for money
B
See Strategy on pages 10
and 11
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IntegraFin
Annual Report 2024
CURO licence users*
3,098 (+13%)
Why this is a KPI
n
Number of paying subscribers to the CURO software at
the period end.
n
Directly correlated to back-office revenue and market
penetration.
2024 performance
CURO licences rose by 13% to 3,098 from 2,752.
This represents robust performance, with the first move
of an existing advice firm client to the new CURO PP.
Strategic pillars
1
Revenue
£144.9m (+7%)
Why this is a KPI
n
Total income generated from the Group’s activities,
including investment platform annual (ad valorem)
charge, periodic wrapper fees, other income and
software licence income.
n
A core measure of financial growth of the Group.
2024 performance
Revenue grew by 7% in the year due to improving annual
charge income as a result of higher average FUD, which
more than offset reduced revenue resulting from the
elimination of buy commission.
Strategic pillars
3
Platform revenue
margin*
23.5bps (-3%)
Why this is a KPI
n
Total platform revenue measured as a percentage of the
average FUD during the year.
n
Demonstrates the ongoing focus on sharing value
generation with our clients through reduction in revenue
margin. Also a key comparison to competitors.
2024 performance
Reduction to 23.5bps during the year, driven by the
elimination of buy commission during the financial year
and the ongoing growth in individual client FUD reducing
their net charges per £FUD.
Strategic pillars
3
PBT
£68.9m (+10%)
Why this is a KPI
n
Statutory profit generated by the Group before
corporation tax.
n
A measure of financial performance of the Group and
demonstration of the ability to invest in the business,
pay dividends and add to the capital base.
2024 performance
PBT rose by 10% during the year, ahead of revenue
growth. A major contributor to this was net interest
income earned on corporate cash which was higher
due to the higher interest rate environment.
Strategic pillars
3
PBT margin*
48% (+4%)
Why this is a KPI
n
PBT expressed as a percentage of revenue.
n
A measurement of the operating efficiency of the
Group’s business.
2024 performance
The PBT margin improved by 4%, benefiting from
the uplift provided by the higher net interest income in the
year.
Strategic pillars
3
EPS
15.7p (+4%)
Why this is a KPI
n
Profit after tax divided by number of shares in issue at
period end.
n
A measure of value being generated for our shareholders.
2024 performance
PBT improved on the previous year where increasing
statutory PBT was offset by the higher effective tax rate
as a result of higher UK corporation tax.
Strategic pillars
3
OPERATIONAL
FINANCIAL
2024
2023
£134.9m
£144.9m
£133.6m
2022
2024
2023
2,752
3,098
2,253
2022
2024
2023
24.3bps
23.5bps
24.7bps
2022
2024
2023
£62.6m
£68.9m
£54.3m
2022
2024
2023
15.1p
15.7p
13.3p
2022
2024
2023
46%
48%
41%
2022
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IntegraFin
Annual Report 2024
Stakeholder engagement
How we engaged
S.172 of the Companies Act (the ‘Act’) requires each director to act in the way they consider,
in good faith, would be most likely to promote the success of the Company for the benefit of
its members as a whole, and in doing so have regard (amongst other matters) to:
(a)
the likely consequences of any decision in the long-term;
(b) the interests of the Company’s employees;
(c)
the need to foster the Company’s business relationships with suppliers, clients and others;
(d)
the impact of the Company’s operations on the community and the environment;
(e)
the desirability of the Company maintaining a reputation for high standards of business conduct; and
(f)
the need to act fairly between members of the Company.
B
See the Section 172 Statement on pages 20 and 21
Considering stakeholders
The board’s role in promoting the long-term success of the Group requires consideration of the balance of interests between all stakeholders
– those being our clients and advisers, employees, regulators, shareholders, suppliers, and the community. Details of how the board has
delivered its responsibilities under s.172(1) of the Act during the financial year are outlined on pages 20 and 21. In addition, our s.172 Statement
outlines how the board has considered stakeholders in its principal decision-making processes.
The following table supports our s.172 Statement by setting out how we have engaged and considered our key stakeholders during the year, the
outcomes and any highlights of such efforts.
Our clients and advisers
How we engage and consider our stakeholders
Outcomes and highlights
Transact
n
Speaking/presenting to advisers and paraplanners at
“Connect Day” regional “breakfast briefing” events, Personal
Finance Society (PFS) and Chartered Institute for Securities
& Investments (CISI) events and conferences across the UK.
n
Working with our clients and advisers to gain feedback on
common development requests from clients and advisers, in
an effort to tailor and enhance our services and functionality.
n
Monthly newsletter to adviser firms to provide updates and
support on our platform offering.
n
Team of Business Development Managers and Adviser
Support Managers covering all of the UK and meeting advisers
face to face and virtually.
Transact
n
Continual review of our products and pricing.
n
Following feedback from clients, advisers and firms, we have
made changes to our offering including:
—
addition of a second dealing point to reduce the time out of
the market for fund switches;
—
release of “Family View” functionality;
—
reduction in paperwork – continued digitalisation of
the platform;
—
launch of additional APIs – to improve integration between
the platform and adviser back-office systems/client portals;
—
introduction of client consent via playback for specific
platform processes; and
—
providing more information on how we manage client cash
on the platform.
T4A
n
High-touch, pre-commitment engagement with prospective
clients to ensure suitability between our software capability
and the needs of the firm.
n
Implementation consultants ensure that on-boarding service
delivery is planned and effectively delivered to clients.
n
Online training sessions to clients to increase their
understanding and use of CURO software technology.
T4A
n
Client feedback helps T4A to continually improve the training
and information it provides to clients on the full range of
functionality that CURO can provide.
n
Clients are supported to extend specific elements of CURO
software to best support the processes and services of the
particular adviser firms.
n
Client influence on product providers and platforms also helps
drive up the availability of data feeds from these external
parties such as valuations.
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Annual Report 2024
Our employees
How we engage and consider our stakeholders
Outcomes and highlights
n
Employee engagement and pulse surveys.
n
In-person town halls led by executive directors showcasing
Group performance and delivering a business update.
n
Non-executive director meet and greet session with employees.
n
“Manager Converse” sessions with the non-executive directors
are held during the year to give the non-executive directors a
deeper understanding of the Group and generate interaction
with managers beyond the executive.
n
Monthly Transact newsletters and bi-annual Group CEO email
updates are distributed to employees.
n
A mentoring programme was rolled out to employees at the
London office.
n
Menopause, mental health and LGBTQ+ forums were introduced.
n
The Group has received its Women in Finance accreditation.
n
We are continuing to evolve our Diversity, Equity and Inclusion
strategy, policy and framework for the Group.
n
Employee participation in the 2024 employee survey was 75%
and feedback indicated satisfaction with inclusivity, trust and
confidence in leadership and communication.
n
All new managers were required to complete a mental health
training session.
n
All managers were required to attend performance
management training.
n
The London office held various initiatives to promote Black
History Month, Mental Health Awareness Week, International
Women’s Day and Pride Month.
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IntegraFin
Annual Report 2024
Stakeholder engagement
continued
Our regulators
How we engage and consider our stakeholders
Outcomes and highlights
n
Regular and proactive interaction with the relevant
Group regulators.
n
The subsidiary boards escalate regulatory issues to the
IHP board.
n
In July 2024 Integrated Financial Arrangements Limited (IFAL)
directors and senior management met the FCA to provide an
overview of the business and discuss regulatory themes.
n
In May 2024, the Prudential Regulation Authority (PRA)
updated its supervisory priorities for IntegraLife UK Limited
(ILUK) and other life insurers and the compliance team is
keeping these under review.
n
The IntegraLife International Limited (ILInt) board and Audit
and Risk Committee (ARC) are regularly briefed on regulatory
developments and expectations and FSA initiatives which
during the year included an updated supervisory approach and
feedback from a Politically Exposed Persons thematic review.
n
ILInt’s managing director sits on the executive committee of
the Isle of Man Insurance Association which meets quarterly
with the FSA.
n
The IHP CEO provided regular updates at the IHP board and
IHP ARC meetings on topics either discussed with, or that are
important to the regulators (FCA, PRA and IoM FSA) during
the year.
n
The boards and ARCs of IFAL and ILUK are regularly briefed
on regulatory developments and expectations, including areas
of interest to the FCA and PRA. This has included Consumer
Duty, IFAL’s Internal Capital Adequacy and Risk Assessment
(ICARA), IT infrastructure, operational resilience, non-standard
investments and permitted links.
n
All staff, UK executives and non-executive directors completed
Consumer Duty training in July 2024. Also in July, the IFAL and
ILUK boards approved the Principle 12 Report (a report
providing information on customer outcomes, business
strategy and areas requiring improvement), following review
and guidance provided by Deloitte LLP.
n
Non-executive directors participated in, and contributed to,
a session on the development of the Group’s climate
change strategy.
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Annual Report 2024
Our shareholders
How we engage and consider our stakeholders
Outcomes and highlights
n
Institutional shareholder roadshows hosted by the CEO and
CFO for half-year and year-end results.
n
Ad hoc meetings with investors after key information updated
to the market.
n
In-person Annual General Meeting at our London
headquarters with the Chair and all non-executive directors
in attendance to take questions from shareholders.
n
Proactive consultation by the board’s Chair and the
Company Secretary with major shareholders on various
governance matters.
n
We have presented our FY23 and HY24 results to analysts and
investors in a live-streamed briefing by IHP’s CEO and CFO,
and Transact’s CEO.
n
We have delivered a programme of Investor Relations video
meetings with potential investors in the US, the UK, Europe,
South Africa, Canada and Australia.
n
The CEO, CFO and Head of Investor Relations met with sales
teams at investment banks.
n
Regular and ad hoc meetings are held with equity analysts,
as well as attendance at UK investor conferences.
n
Engaged a design consultancy to support production of the
Annual Report and Accounts.
n
The Chair and Company Secretary met with the governance
teams at major institutional investors to share thoughts on
a range of topics including ESG, succession planning
and remuneration.
n
We have engaged directly with two of the top ESG rating
agencies to communicate our commitment to sustainability.
n
IHP’s CEO, CFO and Head of Investor Relations have attended
a range of face-to-face investor conferences in the UK.
n
Following receipt of anonymous investor feedback,
facilitated via the corporate brokers, we have tailored our
communications to best address those issues that are
of primary interest to shareholders.
n
Better informed shareholders who have had an opportunity
to field questions and from whom we can take feedback.
n
We increased our rating from BBB to A with MSCI, one of the
most prominent ratings agencies.
n
Feedback from shareholders has, in part, contributed to the
following outcomes:
—
we recruited Euan Marshall as Chief Financial Officer, who
started in January 2024;
—
we are reviewing executive and senior management reward to
ensure that their incentives are based upon our four anchors
(pages 84 to 86) and focused towards sustainable growth of
the Group over the long term;
—
the Remuneration Committee has been engaging with
shareholders regarding the new Remuneration Policy, with
amendments to the proposed Policy made as a direct
result; and
—
we have enhanced IHP’s website information and disclosures,
including greater detail on our sustainability activities.
n
Provided opportunities for analysts to ask questions directly
to the IHP CEO and CFO.
n
Raised the profile of the Company and helped
communicate the Company’s equity story to UK and overseas
investors, broadening of the shareholder base and attracting
new holders.
n
Improved investors and analysts understanding of IHP’s
business model and strategy, as well as introducing Euan
Marshall. In turn, this enhanced the relevance and accuracy
of their research coverage, helped communicate Group
performance to our shareholders in a clearer format and
displayed data in a more legible way.
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Annual Report 2024
Stakeholder engagement
continued
Our suppliers
How we engage and consider our stakeholders
Outcomes and highlights
n
We do not seek to disadvantage, or compromise, suppliers
with whom we conduct business, in line with one of our core
principles of ethical behaviour.
n
We remain focused on our efforts on supplier management
as we continue to enhance our due diligence regarding cyber
security and business resilience. We are working closely with
Operational Resilience function to ensure all supplier testing
is recorded and stored accurately.
n
We are focusing on our sustainability strategy and are
collaborating with suppliers to obtain key information.
n
We remain focused on the correct onboarding of all new
suppliers ensuring correct due diligence and contract reviews
are carried out. This is managed by our dedicated supplier
management manager.
n
Information is shared with management and board
committees where appropriate, in order to provide assurance
regarding supplier selection and management of external and
intra-group suppliers.
n
We undertake health checks on suppliers, highlighting areas
that need more information or where specific information is
missing, giving the business full transparency of all suppliers.
n
We require annual cyber attestations to be completed by our
significant and material suppliers.
n
We continue to focus on our business continuity plan and
developing clear exit strategies for material outsourcing
suppliers and significant suppliers.
n
We are obtaining data and information from suppliers
regarding carbon emissions, reduction targets and
sustainability reporting.
n
We endeavour to pay all suppliers within agreed payment terms.
n
We work with suppliers to ensure no modern slavery or
enforced labour exists in the supply chain. We include specific
clauses in supplier contracts that their employees must be
paid National Minimum Wage.
Our communities
How we engage and consider our stakeholders
Outcomes and highlights
n
We provide staff with an opportunity to be involved in
company-led charity initiatives and consider feedback
on charity suggestions.
n
The Designated Non-Executive Director for ESS is supporting
the board and management in developing the Group’s social
strategy. She held her first Sustainability Forums across the
Group this year.
n
We partnered with the 10,000 Black Interns programme and
welcomed six interns to our London office in summer 2024.
n
We partnered with Kingston University again to provide their
finance students from underprivileged backgrounds with the
opportunity to complete work experience.
n
We made a £5,500 donation to Mind after our employees
completed a “get moving” challenge for Mental Health
Awareness Week.
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Annual Report 2024
Section 172 statement
Our approach
Section 172(1) statement
Understanding the views and interests
of our stakeholders helps the Group make
responsible and balanced decisions. In doing
so, we aim to generate long-term value
for the Company’s shareholders whilst
contributing to wider society by building
strong and lasting relationships with our
other key stakeholders. For our key
stakeholders, see those listed on pages 57.
You can read more about how we engage
with and consider the needs of our key
stakeholders on pages 14 to 18 of the
Strategic Report.
Long-term consequences
of decisions
IHP Group’s strategic objectives are stated on
pages 10 and 11. The Group’s implementation
of its strategy and our assessment of forward-
looking risks affecting its delivery in the future
are set out within the strategic objectives.
The directors make strategic decisions on
future direction, investment and stakeholder
value based on the clear, sustainable,
long-term objectives.
By successfully achieving strategic
objectives, which result in the ongoing
and increased success of the offering,
the directors are able to take decisions
which share the Group’s success with its
key stakeholders.
Interests of our employees
We value our people. They are the core of
our high-quality service delivery to our clients
and advisers, so our employees’ wellbeing
is paramount to the business’s long-term
sustainable success. Details on employee
wellbeing and the culture of the Group are
outlined in the Responsible Business section
on pages 26 to 27. In addition, the Directors’
Remuneration Report on pages 68 to 94 sets
out the Group’s approach to remuneration
which is intended to ensure equitable
remuneration across the Group and which
improves value for employees.
Fostering business relationships
The Group’s business model and strategic
objectives are set out on pages 8 to 11 and
make clear the focus of the business on
delivering high-quality service to clients and
advisers through investment in infrastructure
and employees. An integral part of our
service offering is the provision of regular
relationship management to clients and
advisers as they are our target market.
Fostering good relationships with our
suppliers is an important factor in ensuring
we can continue to service our clients and
advisers effectively. To help embed good
supplier management processes, we engage
regularly with our suppliers and ensure
ongoing relationship management
throughout the term of engagement. We also
endeavour to pay suppliers within payment
terms and do not seek to disadvantage
or compromise suppliers with whom we
do business.
Impact on the community
and the environment
The directors recognise that we have both
a corporate and ethical responsibility to
minimise the impact of the Group’s business
conduct on the environment and community;
this is considered during any principal
decision-making processes by the board.
The Task Force on Climate-related Financial
Disclosures (TCFD) section on pages 33 to
37 and the Responsible Business section on
pages 30 to 32 set out the impact of our
operations on the environment and outline
our community activities that occurred
during the year.
High standards of business conduct
The directors recognise that our service is
only as good as the technology and people
behind it and that the Group’s reputation is
built on high standards of business conduct
which must be maintained in order for the
business to thrive and grow. The board
supports the CEO in embedding a culture
that encourages employees to act with
integrity and to “do the right thing”, in line
with the Group’s values.
The Group maintains a number of policies
governing employee conduct. These are
covered in detail in the People and culture
section on page 29.
The directors also recognise that as the
business is regulated by three separate
regulators, as detailed on page 16,
maintaining strong, open and productive
relationships with the respective regulators
is also business critical.
Acting fairly between shareholders
All shareholders are treated equally, with
information being made available to all
shareholders in a consistent manner.
The board, supported by the Chair and CEO,
actively engages with the Group’s largest
shareholders regularly and feedback received
is shared with the entire board.
Measuring performance against
strategic objectives
Performance against the Company’s
strategy, objectives, business plans and
budgets is considered at each board
meeting. Working in co-ordination with
the Audit and Risk Committee, the board
maintains oversight of the Company’s
operations and ensures the Company
fulfils its business objectives.
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Principal decisions and consideration of stakeholder interests
The table below summarises how the board and the wider Group have had regard to the duties under Section 172(1) when considering specific
matters during the year.
Principal decision
Stakeholders impacted
Our considerations
Price reductions for
the Transact
investment platform
Clients and advisers
Shareholders
Regulators
In December 2023, the IHP board again considered the impact of price reductions
approved by IFAL, IntegraLife UK Limited (ILUK) and IntegraLife International Limited
(ILInt) for Transact, furthering the simplification of our fee model and increasing
transparency and accessibility. As part of this process, the impacts on Ʌompany
profitability and, therefore, shareholder value, were assessed. This decision was in line
with the Group’s strategic objectives to benefit advisers and clients by reducing costs
to clients. The simplification is also expected to attract new flows to Transact as the
new model promotes the accessibility of financial products to a wider community,
which ultimately supports the long-term sustainability of the business.
A capital and liquidity risk assessment was undertaken to ensure the Group’s
regulated entities continue to have sufficient capital to cover their respective
solvency and liquidity risk appetites.
Climate targets
Clients and advisers
Employees
Shareholders
Regulators
Communities
Suppliers
In December 2023, the IHP board reviewed an update on carbon emission reduction
targets and the climate-related scenario assessments relevant to the IHP Group.
The board’s expectation was to align the targets with best practice and the SBTi
Net Zero Standard framework and guidelines, and it was therefore agreed that the base
year be restated to FY22 as this was the most recent year for which data was available.
Additionally, the board agreed a significant new target to reduce absolute Scope 1
and Scope 2 emissions by 60% by the end of FY33.
Move to a new London
office location
Employees
Shareholders
Communities
The Group has agreed to move from its current offices to a new, more modern location
which will provide a positive working space for our people, reflect changes in our
working patterns and help to support our sustainability agenda by moving to a more
energy efficient office.
Remuneration
Policy review
Clients and advisers
Shareholders
Employees
Regulators
Following engagement with our shareholders, a revised Remuneration Policy has
been proposed. Please see pages 68 to 94 for the full Directors’ Remuneration Report.
We believe our approach to performance measurement supports appropriate
consideration of risk management and a long-term view of the business based on
sustainable growth, supports the Company’s strategic objectives and is designed
to be responsible, inclusive and aligned with stakeholder interests.
IFAL capitalisation
Clients and advisers
Shareholders
Employees
Regulators
As part of the Group’s management of internal capital, during the year IHP considered
an additional investment into IFAL. The purpose of this investment was to effectively
manage capital balances across the Group, including for funding, liquidity, and
regulatory requirements, which then enable the continued delivery by the Group of high
standards of operations and service for our clients and their advisers. As a result, IHP
made an additional investment into IFAL of £15 million.
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Responsible business
Creating a more
responsible business
Materiality approach
to sustainability
We aim to consider issues which
matter most to our Group and which
impact our stakeholders.
In 2024 we conducted a materiality
assessment to inform our
sustainability agenda and reporting.
We used a risk-based approach to
identify the most important
sustainability topics to our business
and stakeholders, including our staff,
advisers, suppliers and investors, as
well as the expectations from the
regulators. The material topics
identified can be seen on page 25.
IHP is committed to
conducting business in a
responsible manner, striving
to minimise our environmental
footprint and contributing
positively towards long-term
sustainable outcomes
for stakeholders.
To help us focus on what we can do, like
many companies, we are aligning our efforts
with the United Nation’s Sustainable
Development Goals (UN SDGs). These are a
set of goals and targets designed to improve
socio-economic and environmental
conditions around the world.
Our Group values are centred around
doing the
right thing
,
and
not just for our customers and
advisers, but also our staff, shareholders,
suppliers and the wider community.
By embracing sustainability and aligning our
actions and goals with the UN SDGs we are
ensuring that we are doing the right thing for
all these stakeholders.
“
We recognise and
embrace the positive
impact we can have
by being a responsible
business and the
benefits it can bring
for our people and
local and wider
communities, as
well as the Group.”
Victoria Cochrane
Designated Group Non-Executive Director for ESS
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People
Community
Environmental
Who it impacts
Employees, clients and advisers
and shareholders.
Who it impacts
Employees, local communities, shareholders.
Who it impacts
Clients and advisers, employees, suppliers,
local and the wider community.
Why is it important
Our employees are our priority. Promoting
a supportive and inclusive culture, where
employees feel valued and provided with
the opportunity to succeed, will enable us
to continue to be successful.
Why is it important
Supporting our community is of great
importance to us and we take our
responsibility seriously. We have and will
continue to take steps to make a positive
contribution in this area.
Why is it important
Climate change is already having
a devastating effect on parts of the world,
from extreme weather events to the
degradation of nature.
We recognise that we have a responsibility
to take appropriate action to help combat
climate change.
Material issues and UN SDGs
Staff engagement and culture
Health & safety, wellbeing
Skills development
Diversity, equity and inclusion
Material issues and UN SDGs
Stakeholder management and communities
Material issues and UN SDGs
Energy and decarbonisation
Managing our environmental performance
Climate change
Progress
n
Provided all employees with the
opportunity to partake in a hybrid
working model.
n
Enhanced our family friendly leave
and pay.
n
Obtained accreditations for London Living
Wage and Women in Finance.
n
Established mental health, menopause
and LGBTQ+ forums.
n
Created an engagement strategy in
conjunction with the designated
non-executive director for engagement.
Progress
n
Partnered with Kingston University to
provide underprivileged students on their
RISE programme with the opportunity to
complete work experience.
n
Partnered with the 10,000 Black Interns
programme to provide students or
recent graduates with the opportunity
to complete our internship programme.
n
Supported causes throughout the year,
such as Mental Health Awareness Week
and Black History Month.
Progress
n
Established a Sustainability Forum.
n
Sustainability criteria included in new
London office selection process.
n
Included a climate-related risk on the
corporate risk register.
n
Performed a materiality assessment of
sustainability issues.
n
Our London office now uses 100%
renewable electricity and gas.
n
Conducted a supplier
engagement programme.
n
Held an open discussion for employees
on sustainability issues.
Future priorities
n
Continuing to evolve a DE&I strategy.
n
Reviewing our benefits package to ensure
that it continues to promote and support
the health and wellbeing of our employees.
n
Continue working towards achieving our
gender diversity target of our senior
management cohort, in accordance with
the pledge we made when we signed up to
the Women in Finance charter.
Future priorities
n
Ensuring that our “social” support
is incorporated into the
sustainability strategy.
n
Looking at how we can donate surplus IT
equipment to universities we partner with
and/or charities.
n
Exploring ways we can further support
our community through activities such
as volunteering.
Future priorities
n
Developing a sustainability strategy to
focus our efforts in a directed way.
n
Looking at how we can use our influence
to reduce our Scope 3 emissions.
n
Embedding sustainability
considerations into our supplier
selection and review process.
n
Drafting a transition plan to meet our
net zero goal.
B
See People and Culture on pages 26
and 27
B
See Community on pages 28 and 29
B
See Environmental Matters and
Climate Change on pages 30 to 32
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Annual Report 2024
Responsible business
continued
Governance
The board has overseen progress of the sustainability programme over the course of the year through quarterly updates and recognises that
the Group has both a corporate and ethical responsibility to minimise the impact of the business on the environment.
To ensure oversight, the board has assigned Victoria Cochrane as Designated Non-Executive Director to oversee the environmental and social
sustainability (ESS) agenda, and Rita Dhut as Designated Non-Executive Director for Employee Engagement.
In 2024, the Sustainability Forum, a cross-departmental working group comprising members of the management team from across the Group,
was established. The Forum supports the CEO and Executive Committee team in delivering the wider Group sustainability plans and initiatives
and embedding a climate-aware Group culture. The Forum, with the assistance of the Sustainability Manager, project manages the TCFD and
environmental matters reporting process.
As per the requirements of the PRA’s Supervisory Statement SS3/19, Euan Marshall, the Group’s Chief Financial Officer, is the senior
management function holder responsible for identifying and managing financial risks from climate change.
Materiality assessment
We recognise that in order to have a cohesive strategy and establish where to focus our activities to be more sustainable we need to understand
our current position. Therefore, during FY24 we conducted a materiality exercise to understand our material issues.
The broad definition for sustainability has been used, incorporating environmental, social and community, and governance (ESG) responsibilities
and impacts.
The 2020 GRI Standard requirements were used as the best practice approach to conducting ESG materiality exercises. This involved engaging
internal and external stakeholders, such as employees, suppliers and investors, and reviewing a broad range of issues, current and future trends,
current known and unknown responsibilities, and impacts on and from the business from multiple perspectives.
The review included three assessments:
n
Initial identification of issues
– A review of current regulatory and legal responsibilities, IntegraFin’s activities, and management of known
impacts on a range of stakeholders, communities, and the environment was undertaken. Internal interviews, desk research, analysis of
documentation and existing stakeholder engagement insights and stakeholder impact research were conducted.
IHP board
The board provides leadership, setting the Group strategy, and is accountable for the long-term sustainability of the Group. The board
assigned a designated non-executive director, Victoria Cochrane, to oversee our ESS agenda.
Chief Executive Officer
The CEO, in conjunction with the
board, defines the strategy, values
and culture of the Group. The CEO
sets the leadership tone and leads
the senior leadership team in
delivering the Group strategy and
achievement of business targets.
This includes responsibility for
ensuring climate change risks are
embedded into the Group’s
sustainable business plans.
Remuneration Committee (RemCo)
RemCo supports executive
accountability by linking deliverables
with remuneration. TCFD and ESS
targets were reviewed in 2024.
Audit and Risk Committee (ARC)
The ARC is responsible for oversight
of risks to the business including
those arising from climate-related
scenarios. The ARC has
responsibility for monitoring the
quality of reporting of the Group’s
GHG emissions and future
decarbonisation targets within the
TCFD disclosure.
lHP Executive Committee (ExCo)
The IHP ExCo applies the business
plans to its business operations In
support of the CEO. It is responsible
for business risk identification,
including climate-related change and
scenario risk and opportunities
assessments. It is responsible for
embedding actions into its business
plans, and support emissions data
gathering and delivering
against targets.
Sustainability Forum
The Sustainability Forum, comprising
members of the Group’s
management team, is responsible for
supporting and driving the
implementation of the broader
sustainability agenda.
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Annual Report 2024
n
Validation and confirmation of the list
– Insights were gained by interviewing external stakeholders, conducting a mid/long-term mega-trend
impact analysis, and completing a peer review. The findings were incorporated into the list of material issues from the ESG perspective.
n
Analysis and prioritisation
– The resulting list of material issues was reviewed by IntegraFin’s internal steering group, which was set up to
help develop the sustainability strategy, to establish priority by importance to stakeholders and importance to IntegraFin’s success.
This created the materiality matrix below. Typically, the issues in the top right-hand quadrant are identified as priorities and will underpin the
development of a sustainability strategy over the coming year. Several issues that are of more importance to stakeholders than to the Group are
those for which we believe our corporate operations have a limited impact.
2024 IntegraFin material sustainability issues
Importance to IntegraFin
Importance to stakeholders
Medium
Medium
High
High
4
20
7
21
22
24
3
5
10
11
9
13
19
1
12
18
17
16
8
6
2
Environment related
1
Energy and decarbonisation
2
Water management
3
Managing our environmental performance
4
Waste and resource management
5
Climate change
6
Biodiversity
7
Sustainable supply chain management
Society and people related
8
Diversity, equity and inclusion
9
Skills development
10
Talent acquisition and retention
11
Health and safety, wellbeing
12
Staff engagement and culture
13
Fair supply chain
Governance related
14
Corporate purpose
15
Business strategy
16
Corporate ethics, values and behaviours
17
Board leadership
18
Group and ESG governance
19
Responsible communication
and market engagement
20
Stakeholder management and communities
21
Product governance and digitalisation
22 Proactive compliance
23
Responsible risk management
24
Client responsibility
23
15
14
How sustainability is embedded in our organisation
Business function
Consideration
HR
Develops a people strategy that focuses on attracting and retaining talent and the evolution of our collaborative and
inclusive culture. Conducts annual employee survey including questions on sustainability.
Sustainability
Performs employee and supplier engagement on sustainability matters. Performs an anti-greenwashing review
of the Group’s promotional materials. Records Group carbon emissions and monitors against target.
Sales Support and
Client Operations
Liaises with clients and their advisers to consider sustainability expectations.
Facilities
Monitors and manages our buildings’ exposure to climate-related risks. Measures and manages operational energy use.
Supplier Management
Considers resiliency of suppliers against potential climate-related risks.
IT
Sustainability considerations are embedded in the delivery and ongoing management of technology change.
Group Internal Audit
Periodic review of documentation of climate-related risks and compliance with TCFD recommendations.
Compliance
Ensures the Group meets climate-related standards and obligations.
Finance
Considers the potential financial impacts of climate-related risks.
Investor Relations
Liaises with investors on sustainability matters including inviting them to participate with their views on
sustainability enhancements.
Group Risk
Management
Embedding climate-related risks into our risk management framework (RMF) and reflecting the risks and impacts
of climate-related changes within the Group’s regulated entities ICARA and Own Risk and Solvency Assessment
(ORSA) processes.
T4A
Operational emphasis on recycling and digitalising internal processes.
ILInt
Actively trying to reduce waste in the office by reducing printing volumes and pushing for recycling facilities for the
whole building.
IAD
Focuses on digitalisation of Transact process to improve efficiency and reduce reliance on paper. Adopts a similar
mindset for own operations.
London Office Move
Project Team
Maintains a focus on, as a minimum, adhering to best practice energy efficiency standards for the next London
office building.
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People and culture
Our people have always been, and continue
to be, our top priority.
This year we have been focused on maintaining an engaged
workforce. Our people strategy has been primarily engaged in the
attraction and retention of talent and continued evolution of our
collaborative and inclusive culture. We have worked to achieve this by:
n
introducing a performance related bonus framework, which
recognises and rewards high talent;
n
supporting our community by partnering with the 10,000 Black
Interns programme and the RISE programme at
Kingston University;
n
running a performance management training programme for
all managers;
n
implementing a mentoring framework to support the creation of
a diverse talent pipeline; and
n
introducing our first LGBTQ+, menopause and mental health first
aid employee forums.
The board has continued to support the engagement framework and
work has continued to ensure the activities within this framework
have been implemented. This year, the activities have focused on
evolving communication across the Group, embedding culture in
all people practices and recognising and rewarding high talent.
We will further develop and deepen these activities in 2025.
Looking forward, we are committed to maintaining our healthy culture,
which is focused on ensuring our employees are engaged, motivated,
and committed to supporting the Group in achieving its goals. We are
proud of our employees and our culture which is fully aligned with
promoting the future success of the business.
“IntegraFin continues
to maintain an engaged
and motivated workforce.
This healthy culture
underpins our success
as a business upon
which we aim to build
in the coming year.”
Rita Dhut
Designated Non-Executive Director
for Employee Engagement
FY24 highlights
n
Introduced a performance related bonus framework.
n
Ran a performance management training programme
for all managers.
n
Partnered with Kingston University to provide work
experience to students on their RISE programme.
n
Partnered with the 10,000 Black Interns programme and
welcomed six interns in June 2024.
n
Carried out our third annual engagement survey.
n
Introduced LGBTQ+, menopause and mental health
employee forums.
n
Introduced a mentoring framework to support the creation
of a diverse talent pipeline.
n
Enhanced our Shared Parental Leave Policy to support
working parents.
n
Set diversity targets as part of our Woman in
Finance accreditation.
FY25 priorities
n
Continue to enhance employee engagement
and motivation.
n
Progress against Women in Finance targets.
n
Support employee-driven sustainability initiatives.
n
Support our community.
n
Progress our diversity, equity and inclusion initiatives.
People engagement
Engagement survey
The ongoing engagement of our employees is of primary importance
as we know that they are at the centre of our success. We held our
third annual Group engagement survey this year, which enabled us to
measure the progress we have made, see what we are doing well and
identify further opportunities for improvement.
The survey comprised ten sections this year: role, training and
development, leadership, reward and recognition, wellbeing, inclusion,
communication, our customers, our company and sustainability.
We were very pleased to see a 13% increase in our response rate this
year and with the ongoing high levels of engagement in most areas.
The highest engagement scores were in relation to customer
experience (96%), our values being aligned to the way we do business
(96%), communication (93%), inclusion (92%) and trust and respect
in leadership (90%).
This year we included a new section on sustainability in our survey, to
measure the importance our employees place on this topic and to
measure how much they know about the Group’s activity in this area.
We were pleased to understand that 86% of respondents feel that it is
important the Group does what it can to address climate change and
sustainability issues. The results of the survey highlighted that
employees would like a better understanding of what the Group is
doing to address climate change and sustainability issues and this will
be a key focus over the next year.
We will continue to create localised action plans for each subsidiary
company as this has been a successful approach and has best
engaged our employees.
Responsible business
continued
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IntegraFin
Annual Report 2024
Health and wellbeing
We understand that the health and wellbeing of our employees is of
primary importance. This year we have continued to encourage a
culture of openness and the breaking down of stigmas, so employees
can be open and honest about how they are feeling.
We have introduced a Menopause Forum. This creates the space for
open conversations and encourages conversation about what the
Company can do to support those experiencing the menopause or
employees who are supporting someone who is.
We have continued to promote mental fitness within the Group.
All managers at our London office continue to be enrolled on to mental
health awareness training, which is delivered by an external expert
provider. Ensuring all of our employees have the opportunity to attend
a similar training session, with the same expert provider and on the
same topic reinforces to our employees the importance we place on
inward introspection to remain healthy.
This year we celebrated mental health awareness week by
encouraging our employees to focus on movement in nature to
support their mental health. All employees in the Group were invited
to take part in a movement challenge, to raise money for Mind.
Our employees covered 2,785 miles and the Company made a £5,500
donation on their behalf.
These initiatives are complemented by a suite of non-salary benefits for
employees and their families to utilise. All employees and their families
are able to join our company-funded medical insurance schemes from
their first day of employment. They also have access to a digital
healthcare service in order to book GP and physiotherapy appointments.
Additionally, all have direct access to our employee assistance
programme, which is a confidential service offering professional
help and support on a wide range of domestic concerns.
We understand the importance of ongoing support and education
in these areas and will continue to evolve these practices over the
next year.
Internal communications
Our senior managers understand the importance of ongoing, effective
communication with employees as this supports our culture and
ensures employee alignment with our strategy and values. This year
we have further enhanced the communications across the Group
and we were pleased to see this reflected in our employee
engagement scores.
Alexander Scott, Euan Marshall and Jonathan Gunby have provided
in-person company updates to all employees across the Group on
financial results and the business strategy. Attendees were invited to
ask questions and engage in discussion.
This year the non-executive directors also hosted a meet and greet
after the AGM at our London office, which all employees were invited
to attend. This was an opportunity to further enhance the feedback
loop between the board and employees and provided employees with
the opportunity to better understand the role of a non-executive
director and their responsibilities.
Our non-executive directors have continued to host regular “Manager
Converse” sessions with members of the senior management team.
This Forum allows the senior managers to provide an update on key
departmental issues, future plans and team environment. These
meetings are invaluable as they provide the non-executive directors
with insight into the culture and operational detail of the business in
a structured format.
Talent management
A key component of our people strategy is the attraction and
retention of talent, and we understand that employee development is
an important tool to do so. This year we have worked to deliver our
training and development strategy which has comprised
performance management training for managers, mental health
training for managers and employees and a suite of regulatory
training to ensure our employees are competent to deliver the best
service to our customers.
We have taken further steps to evolve our talent maps and
succession plans, bolstering our robustness for the future. Talent
maps are in place for all employees and technical competence,
conduct and behaviours are all considered in the assessment of an
employee’s talent profile. Our succession planning processes have
also deepened. We have robust succession plans in place for all
senior managers, with identified successors and development plans.
Over the next year we will continue to roll out these plans across
the business and support all identified successors in their training
and development.
To support our talent over the next year we intend to embed our
mentoring programmes and succession planning across the
Company. This will re-enforce our intention to further diversify
our talent pipeline to drive the business in its future success.
Diversity, equity and inclusion (DE&I)
We pride ourselves on creating a diverse and inclusive culture
which provides all employees with equity of opportunity.
We operate on the principle that greater diversity and experience
within our business will deliver the greatest success.
There are already a number of people practices in place
enabling the Group to treat all its employees and potential
employees fairly and equitably. All of these are underpinned
by our Equal Opportunities Policy, which is regularly reviewed
to ensure we meet our DE&I goals.
To demonstrate the value we place on working parents,
we have built on the changes we made to our maternity and
paternity pay offering last year by strengthening our shared
parental leave pay offering this year.
As part of our Women in Finance accreditation we have set
a target to create a strong talent pipeline of females across
the workforce, through improved activity and succession
planning, mentoring programmes, training and career
development and enhanced recruitment practices. This will
be supported by the achievement of a 45% female
representation on our senior management team by 2027.
It remains important to us that we provide all employees with
a voice and the opportunity to be their authentic selves whilst
at work. This year we have supported many causes including
Black History Month, Mental Health Awareness Week,
International Women’s Day and Pride Month. We also
introduced a new LGBTQ+ forum.
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Annual Report 2024
Responsible business
continued
Community
In a new initiative for the Group, this year
we partnered with the 10,000 Black Interns
programme to provide six individuals with
the opportunity to complete an internship
programme at our London office.
This year we re-commenced our partnership with Kingston University
to provide some of their finance students from underprivileged
backgrounds with the opportunity to complete work experience at our
London office. The second cohort of work experience students joined
us in September 2024 and the students were able to obtain
experience of working within several of our departments.
Over the next year we will enhance our community support and the
evolution of our social strategy.
Our workforce
Our workforce is located in the UK, Australia and the Isle of Man.
The headcount per subsidiary company, as at 30 September 2024,
is as follows:
Group headcount
IntegraFin Services Limited
480
IntegraLife International Limited
10
Time4Advice Ltd
53
IAD – (UK and Australia)
123
Total Group headcount
666
The following charts detail the gender ratio at each of the Group’s
subsidiary companies who employ staff. These ratios are accurate
as at September 2024.
ISL – Employee gender ratio
IAD – Employee gender ratio
Female – 39%
Male – 61%
Female – 21%
Male – 79%
T4A – Employee gender ratio
ILInt – Employee gender ratio
Female – 32%
Male – 68%
Female – 90%
Male – 10%
Gender pay gap
IntegraFin Services Limited (ISL), one of our Group subsidiaries, is
required to publish its gender pay gap information on an annual basis.
These results have always compared favourably to other companies
in our sector.
Mean gender pay gap
including bonus
Median gender pay gap
including bonus
13%
2019
5%
14%
2020
9%
10%
2021
4%
18%
2022
4%
17%
2023
8%
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We are pleased to see that the mean pay gap had decreased this year
as this further evidences that our overall pay structure remains fair and
equitable. It is acknowledged that there has been an increase in the
median (midpoint) gender pay gap this year. This is due to the following:
n
a greater proportion of females working on a part-time basis in the
middle quartiles, and their pay being pro-rated accordingly. If the
full-time equivalent salaries were used within this calculation the
gap would reduce to 2.75%;
n
fewer senior male employees taking advantage of the opportunity
to work flexible working hours;
n
senior female employees being on maternity leave as at the
snapshot date and therefore, they could not be included within
our data; and
n
the impact of senior females being on maternity leave having
a disproportionate effect when compared to males on
paternity leave.
We keep our pay and benefits structure under review to ensure our
salaries are equitable when compared to internal peers and the
external market. We will not exclusively advantage females but will
continue to remove any actual or perceived barriers female
employees could be more likely to face than their male colleagues.
The changes we have made to our Shared Parental Leave Policy this
year support these objectives and we hope that this change will help
to close the gap further.
Diversity data
The Group employs 666 employees, and 5 non-executive directors are
officers of the Company. The breakdown of our people by gender, as
at September 2024, was as follows:
Male
Female
%
%
IHP board directors
6
67
3
33
Senior managers
5
50
5
50
Direct reports
23
59
16
41
All other employees
392
64
221
36
Total
426
245
Senior managers are members of the IHP Executive Committee who are not
on the IHP board. Direct reports report into either an IHP board director of a
senior manager.
Ethical standards
The Group is committed to a high standard of governance, ethical
and moral standing. Our core value of “doing the right thing” underpins
all our operational practices and informs our employees’ conduct.
This is formalised in our internal policies which are made available to
all employees on our intranet. We require our employees to undertake
regular, mandatory training to ensure awareness and understanding
of their provisions. Our ethical standards are comprised primarily
of the policies that govern employee conduct, including the Equal
Opportunities Policy, Anti-Harassment and Bullying Policy,
Anti-Bribery and Corruption Policy, Anti-Money Laundering Policy
and Whistleblowing Policy.
Anti-bribery and corruption
The Group has a zero-tolerance approach to financial crime to
protect ourselves, our clients and our stakeholders. Our Anti-Bribery
and Corruption and Anti-Money Laundering policies set out the
controls and processes in place to prevent financial crime, as well as
the responsibilities of our employees, both generally and in key
departments or roles. Each policy is reviewed and updated annually
by the Money Laundering Reporting Officer. All employees are
also enrolled on mandatory whistleblowing and anti-money
laundering training.
Internal audit conducts audits of our operations, controls and
processes based on risk areas, and policies identified as high risk,
which includes financial crime-related policies, form part of the risk
assessment exercise to produce the Internal Audit Plan. For more
information on our internal audit approach, the Group Internal Audit
Charter is available on our website at: https://www.integrafin. co.uk/
legal-and-regulatory-information/.
Whistleblowing Policy
Recognising that the ability to voice genuine concern without fear of
reprisal is essential, the Group maintains a Whistleblowing Policy
applicable to all employees which is available to view on our intranet.
This reiterates our employees’ responsibilities in reporting suspicions,
outlines the reporting lines for whistleblowing concerns and
establishes that whistleblowers are protected from retaliation. In line
with all policies, we periodically audit our Whistleblowing
arrangements.
Human rights and modern slavery
We continue to recognise the important role we have to play in the
support of human rights and we do not tolerate modern slavery of
any kind. The Group continues to underpin this support through the
publication and enforcement of our modern slavery statement which
applies to all Group companies and all suppliers. The statement can
be found at: https://www.integrafin.co.uk/modern-slavery/.
“Our success is built
on our staff. Their
motivation and
engagement is
evident every time
they deal with clients
and advisers.”
Alexander Scott
Chief Executive Officer
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Annual Report 2024
Responsible business
continued
Environmental matters
and climate change
We recognise the impact that climate change
could have on the Company and our key
stakeholders and our responsibility to take
action to reduce our emissions.
Our climate change journey
We have made positive strides during the year in understanding and
defining the next steps of our climate change journey. Key highlights
are listed on page 32.
In addition, the move to online applications for the Transact platform
means that over 80% of all portfolios opened in the year were online,
resulting in a significant reduction in paper. We have also reviewed
internal paper use resulting in each of our offices making efforts to
reduce printing. We continue to recycle all confidential waste at the
London office.
100% of the electricity supplied to our London office and UK-based
data centres, which account for 97% of our UK and Isle of Man (IoM)
Scope 2 emissions, is from renewable sources.
Following the introduction of the FCA’s Sustainability Disclosure
Requirements and investment labels regime we performed a review
of Transact’s, and the wider Group’s, promotional materials to ensure
that we complied with the anti-greenwashing rules and we have
introduced functionality to the Transact platform to meet
its requirements as a distributor.
Following our increased focus on climate change in 2023 we were
pleased to see this reflected in our improved scores from external
sustainability rating agencies. Our second submission to CDP received
a score of C, up from a D, and MSCI awarded us an A, up from BBB.
We recognise that, despite the progress made this year, we still have
work to do and plan to address the following in the short term:
n
Developing a sustainability strategy to focus our efforts on the
issues that are most material to the business and our stakeholders.
n
Reducing energy use by moving our London office to a more energy
efficient building.
n
Updating our supplier onboarding process to consider
sustainability factors.
n
Continuing our programme of employee and supplier engagement.
n
Considering where we can use our influence to reduce our indirect
Scope 3 emissions by encouraging sustainable commuting to
work and sustainable procurement policies.
n
Improving our data collection for Scope 3 emissions.
Following this, we will look at the following in the medium and long term:
n
Updating our scenario analysis work in 2026.
n
Producing a Sustainable Supply Chain Charter.
n
Producing a transition plan using the Transition Plan Taskforce
disclosure framework published in October 2023. This will
consider internal carbon prices as well as carbon-related
opportunity metrics.
Carbon emissions calculation methodology
and assumptions
We calculate our emissions in line with the Greenhouse Gas (“GHG”)
Protocol standards and use the operational control approach to
determine our organisation’s boundary. Our emissions relate to
entities and assets which the Group owns or controls i.e. leased
premises and right-of-use assets.
The GHG emissions sources that constituted our operational
boundary for the financial year were from our offices based in London
and Norwich in the UK; the IoM; and Melbourne, Australia.
Scope 1
covers emissions from sources that an organisation owns
or controls directly. For the Group, this comprises emissions from
the use of boilers in all our offices and fugitive emissions (refrigerants
top-ups leaks). Data for fugitive emissions was not available for the
IoM office, hence this office was excluded in calculations. Efforts will
be made to get this data in future years.
Scope 2
covers emissions that an organisation makes indirectly, for
example when energy is purchased. For the Group, this comprises
purchased electricity and emissions from use of data centres. In line
with Scope 2 Guidance from GHG Protocol, we have reported emissions
using the location-based method, using average emissions factors
for the country in which the reported operations take place; and the
market-based method, which uses the actual emissions factors of
the energy when certified green electricity has been procured.
Renewable energy use is based on REGO energy certificates, and
where these are unavailable, commitment certificates for renewable
energy use.
Scope 3 Fuel and energy-related activities uses the 2024 UK
Government GHG Conversion Factors for Company Reporting applied
to total purchased electricity use.
Both Scope 1 and 2
We use primary data from periodic utility bills
or secondary data from landlords or facility management companies
for space occupied by our offices and from use of data centres. In
periods where we were unable to obtain actual data we utilised an
extrapolation method to cover 366 days with consideration given to
seasonal variation. Where sites are shared with other businesses, it is
assumed that energy usage is proportionate with office space leased.
Emissions are calculated using the UK Government GHG Conversion
Factors for Company Reporting and Australian National Greenhouse
Accounts Factors.
Scope 3
comprises emissions which are a consequence of an
organisation’s business activities but that it does not directly control.
For the Group, these activities, including the methodology for
collecting, calculating and reporting the related emissions data and
any significant judgements or assumptions made to determine the
emissions, are shown in the table opposite.
This year we carried out an engagement programme with our suppliers
to obtain emissions data directly. Where good quality data was received,
we have used this alongside publicly available information, to improve
the quality of this metric. Where this information was not available we
have continued to use the spend-based industry average emissions.
Emissions are calculated using the 2024 UK Government GHG
Conversion Factors for Company Reporting and the 2021 Conversion
factors by SIC code provided by the Department of Environment, Food
& Rural Affairs (DEFRA).
Data availability for Scope 3 emissions is not as accessible as for
Scope 1 and 2 and therefore the data quality for Scope 3 emissions is
not as high as that for Scope 1 and 2. We will continue to review and
refine our methods for data collection across all Scopes to ensure
greater accuracy and an improvement in reporting year on year.
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Scope 3 data methodology and assumptions
Scope 3 category
Carbon emissions calculation methodology
Significant judgements or assumptions
1. Purchased
goods and
services
(PGS)
2. Capital goods
(CG)
For both PGS and CG, the supplier-based method is used
where good quality data is available, else the spend-based
method is used. Surveys are sent to regular suppliers
asking for information on their Scope 1, Scope 2 and
upstream Scope 3 emissions relating to the business they
do for the Group. Where the Group’s proportion of
emissions is not calculated by the supplier, the suppliers’
revenue is used for the Group’s spend to derive the Group’s
emissions for that supplier.
Data received directly from the supplier is used, where
provided, and where necessary supplemented with publicly
available data.
For PGS, data has been reported for the top 50 suppliers of
the Group (covering over 80% of spend with suppliers).
Intra-company, taxes paid and fees paid to regulators were
not included in the 80% coverage.
For CG, the supplier-specific method was used for one
supplier and the spend-based method was used for the
others.
For both PGS and CG, a best estimate basis was used to
allocate suppliers to DEFRA SIC codes factors used for the
spend-based method. Tax on PGS and CG was dealt with in
the same way as the financial accounting approach of each
entity.
3. Waste
generated
in operations
Solid waste:
Waste weight data and disposal routes for all
sites are obtained from landlords or facility management
companies. Where this data is not available, an estimate of
waste per person per annum is derived based on sites
where data is available.
Water use and wastewater:
Water meter readings are
obtained from landlords or facilities management
companies. Where this data is not available, an estimate of
water use per person per annum is derived based on sites
where data is available.
Where primary data is not available, it is assumed that each
Group location has similar levels of waste and water per
employee per annum.
For waste, due to the lack of data availability for the IoM and
Melbourne offices, estimates of waste per person per annum
from the London and Norwich offices was used.
For water, due to the lack of data availability for the IoM office,
estimates of water use per person per annum from the
London, Norwich and Melbourne offices was used. It is
assumed that 90% of water supply is wastewater for all
locations.
4. Business
travel
A download of expense reimbursements claimed by
employees in the year and travel-related invoices is used for
calculating business travel emissions. Where good quality
data is available for travel, the distance-based method is
used and for the rest, the spend-based method is used.
The expenses reimbursed and travel-related invoices booked
in the year are used for emissions calculations, instead of the
travel for the year. This is due to lack of data availability of
date of travel.
5. Employee
commuting
and
homeworking
An annual survey is sent to employees based in the London
and IoM offices to gather data on employee commuting
and homeworking trends. The survey asks for days worked
in the office and at home, distance and mode of transport
and fuel type and car size in case of car travel.
Emissions are calculated for the number of full-time
equivalent (FTE) employees that answer the survey
extrapolated to cover FTE employees as at 30/09/24. Any
survey responses that have poor quality data are excluded
and incorporated through extrapolation. Five weeks of annual
leave, two days of sick leave and eight days of public holiday
are assumed for all employees.
Greenhouse gas (GHG) emissions data
Financial year 2022 is the base year against which our reduction targets have been set. Therefore, emissions data for 2022 has been included
below, as well as current and prior data.
Our operational greenhouse gas emissions (tCO
2
e)
UK and IoM emissions
Australia emissions
Total emissions
2024
2023
2022
2024
2023
2022
2024
2023
2022
Scope 1
89
99
146
11
25
20
100
124
166
Scope 2 (location based)
173
179
166
153
188
217
326
367
383
Scope 2 (market based)
7
—
—
153
—
—
160
—
—
Total Scope 1 and 2 (location based)
262
278
312
164
213
237
426
491
549
Scope 3
Purchased goods and services
1,333
1,353
979
37
—
—
1,370
1,353
979
Capital goods
330
215
106
61
—
9
391
215
115
Fuel and energy-related activities
15
15
15
16
14
18
31
29
33
Waste generated in operations
3
7
3
1
1
—
4
8
3
Business travel
307
226
52
157
121
15
464
347
67
Employee commuting and homeworking
347
348
451
58
52
73
405
400
524
Total Scope 3
2,335
2,164
1,606
330
188
115
2,665
2,352
1,721
Total Scope 1, 2 and 3
2,597
2,442
1,918
494
401
352
3,091
2,843
2,270
Emissions intensity – tCO
2
e per FTE employee at year end
4.6
4.4
3.8
5.4
4.7
4.5
4.7
4.5
3.9
Emissions intensity – tCO
2
e per £1 million revenue
—
—
—
—
—
—
21.3
21.7
17.3
Carbon emissions are rounded to the nearest whole number. Intensity metrics are rounded to the nearest one decimal place.
Scope 3 categories were reviewed for relevance and those not included in the above list were deemed not relevant to the Group.
We started reporting market-based Scope 2 emissions in FY24.
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Responsible business
continued
Our carbon and climate change plan
The below illustrates the achievements of the Group in the last three
years and sets out the next steps to be taken over the short, medium
and long term for the Group as it transitions towards achieving its goal
of being net zero.
Initiative pathway
Year 1 and 2 reporting
achievements
n
Confirmed baseline year
for emissions
n
Measured and reported
Scope 1, 2 and 3
emissions
n
Assessed climate
change risks and
opportunities
n
Established senior
governance
responsibilities
Year 3 reporting
achievements
n
ESG materiality
assessment
n
Established a
Sustainability Forum
n
Supplier engagement
programme
n
Employee Forum on
sustainability
Short term
n
Develop a sustainability
strategy
n
Perform climate change
scenario analysis
n
Draft transition plan and
design roadmap to meet
net zero targets.
n
Adoption of ISSB
standards
n
Measure, reduce
emissions and report
n
Full climate change
risk register
n
Climate change register
of compliance
n
Employee awareness
and training
n
Supply chain climate
change standards
Medium term
n
Sustainability strategy
embedded
n
Validation of net
zero roadmap
n
Measure, reduce
and report emissions
and strategy
n
Climate change risks
framework review
and update
n
Employee, investor, and
client engagement
n
Supply chain standards
extended to
sustainability
n
Adoption of TNFD
standards
Long term
n
Action delivery against
net zero roadmap
n
Measure, reduce
and report emissions
and strategy
n
Asset owner
engagement
and influence
n
Supply chain auditing
n
Platform ESG insights
supporting IFA/clients
Greenhouse gas (GHG) emissions data
continued
Our operational greenhouse gas emissions (tCO
2
e)
continued
Scope 1 and 2 carbon emissions at all office premises were down
compared with last year following successful initiatives to reduce
energy use through improved automated settings in the London office
and a full year of having solar panels in the Melbourne office. This was
offset by an increase of electricity use at the third-party data centres
due to servers and data storage being moved there from the London
office to take advantage of the more energy efficient set-up they
provide. Group Scope 1 and 2 carbon emissions are down 22%
against our baseline year of 2022.
Total Scope 3 emissions continue to be driven by purchased goods and
services, capital goods, business travel and employee commuting and
homeworking. We revisited our methodologies of data collection for
these categories this year and a more granular approach , as well as an
increase in Group expenses, has resulted in an increase in Scope 3
emissions. We will continue to evolve our approach, as improving the
accuracy of the data we use going forward and relying less on
estimations, in addition to taking positive action, will lead to a reduction.
Review and validation of metrics
In FY23, we engaged external independent sustainability consultants,
Brite Green Limited, to validate the data collection and calculation
methodology process of the greenhouse gas emission metrics to
ensure it was appropriate and robust, and to review the metrics in the
Greenhouse gas (GHG) emissions data table above for FY22 and
FY23.
Energy consumption
by location
Carbon emissions
by location
UK and IoM – 1,196 kWh (82%)
Australia – 255 kWh (18%)
UK and IoM – 262 tCO
2
e (62%)
Australia – 164 tCO
2
e (38%)
In relation to carbon emissions, the almost-four-times-higher carbon
intensity of the national grid in Australia compared to the UK results
in the carbon emissions from the Melbourne site being a far higher
proportion of total emissions than its energy consumption.
The solar panels installed on the roof of the Melbourne office in April 2023
have helped the Group avoid 11% of base year Scope 1 and 2 carbon
emissions in the current year and 84 tCO
2
e in total.
2022–23
2024
2025–27
2027–35
2035–50
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Annual Report 2024
This is the third year that we are disclosing under TCFD and we have made progress in terms of the governance of assessing and managing our
climate-related risks and opportunities by establishing a management-level Sustainability Forum and in terms of our risk management process
by including a climate-related risk on our corporate risk register.
Our TCFD Report reflects the activities undertaken by the Group during FY24. All Group entities, including the regulated entities, have been
considered when identifying and measuring the climate-related financial impacts, risks and opportunities and their impact, which have been
incorporated on a consolidated basis within this report.
For details on key activities that the Group has worked on this year please see pages 30 to 32.
Compliance statement
The FCA’s ESG sourcebook, TCFD all-sector guidance and the Financial Reporting Council (FRC)’s review of TCFD reporting were considered in
producing this report. Additionally, the TCFD’s Supplemental Guidance for the Financial Sector, in particular the guidance for insurers and asset
owners, was considered. However, IHP has not disclosed against these supplemental requirements as the nature of the insurance contracts
written by the insurance companies in the Group, as well as the investment strategies, are not under the control of the Group.
FCA Listing Rules
Our TCFD Report follows the October 2021 recommended guidance with disclosures structured around four themes: governance, strategy,
risk management and metrics and targets. In support of these themes there are 11 recommendations that provide guidance for developing
effective disclosure.
In accordance with paragraph 8(a) of Listing Rule 9.8.6R, the table below sets out our compliance with the recommendations and identifies the
areas where improvements to Group activities and reporting have been made during the year.
UK Climate-related Financial Disclosures (CFD)
We are compliant with the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. As stated above we are
compliant with the 11 recommended disclosures of TCFD. In addition, we have stated our frequency of performing scenario analysis and
described why particular scenarios were chosen.
TCFD compliance status
Disclosure level:
Full
Partial
Omitted
Theme
TCFD recommended disclosure
2024
Page(s)
Progress and rationale for disclosure level
Governance
Disclose the organisation’s
governance around
climate-related risks
and opportunities.
Describe the board’s oversight of climate-related
risks and opportunities.
34
A Climate Update is now a rolling agenda
item for quarterly IHP board meetings.
Describe management’s role in assessing and
managing climate-related risks and opportunities.
34
Establishment of Sustainability Forum that
meets monthly to discuss sustainability
matters at an operational level.
Strategy
Describe the actual and
potential impacts of
climate-related risks
and opportunities on the
organisation’s businesses,
strategy and financial
planning where such
information is material.
Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium and longer term.
35–37
The climate change analysis undertaken last
financial year did not identify any material
impact on the Group within the financial and
strategic planning cycle.
A sustainability strategy is being developed.
This will address all outstanding disclosure
areas to ensure we become fully compliant.
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy and financial planning.
35–37
Describe the resilience of the organisation’s
strategy taking into consideration different
climate-related scenarios, including a 2
º
C or
lower scenario.
36–37
Risk management
Disclose how the
organisation identifies,
assesses and manages
climate-related risks.
Describe the organisation’s processes for
identifying and assessing climate-related risks.
37
Climate-related risk has been included on
the corporate register.
Climate-related risks are identified and
managed in line with our RMF as detailed
on page 44.
We will further explore the link of climate-
related risks to principal risks and their
impacts and mitigations.
Describe the organisation’s processes for
managing climate-related risks.
37
Describe how the processes for identifying,
assessing, and managing climate-related
risks are integrated into the organisation’s
overall risk management.
37
Metrics and targets
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
Disclose the metrics and targets used by the
organisation to assess climate-related risks and
opportunities in line with its strategy and risk
management process.
37
Improved data collection methodology for
purchased goods and services by using data
directly from key suppliers.
We will explore metrics and targets to use
over different time horizons to assess and
manage climate-related risks and
opportunities.
Disclose Scope 1, 2 and 3 greenhouse gas
(GHG) emissions, and related risks.
31–32
Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets.
37
Task Force on Climate-related Financial Disclosures (TCFD)
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Areas of improvement
When we next perform scenario analysis, in FY26, we will explore the quantitative impacts of risks and opportunities, including the impact
of carbon pricing. We will also consider the physical impacts of a very high temperature scenario, for example above 3°C.
In FY25 we will be considering additional appropriate metrics and KPIs to measure risks and mitigating actions for each risk.
Governance
Board oversight of climate-related risks and opportunities:
Board committee
Responsibilities and matters considered
IHP board
The board is ultimately responsible for risks and opportunities facing the business, including those related to climate
change. Climate-related actions, strategies and progress towards targets are included on board meeting agendas
and are considered as part of the board decisions and strategy, contributing to the long-term sustainability
of IntegraFin.
Matters considered in 2024
– progress against carbon emission reduction targets, available carbon reduction
strategies for Scope 3, updates on ESG regulatory and industry news.
Frequency of reporting
– quarterly.
IHP Audit and Risk
Committee (ARC)
The ARC is responsible for oversight of risks to the business including those arising from climate-related scenarios.
The ARC challenges management on progress of actions identified to manage the risks and improve the overall
control environment.
The ARC has responsibility for monitoring the quality of reporting of the Group’s GHG emissions and future
decarbonisation targets within the TCFD disclosure. The Group Internal Audit team undertakes thematic reviews of
processes, procedures and controls and suggests improvements. Both will utilise external consultants and expertise
when needed.
Matters considered in 2024
– same as those considered by IHP board.
Frequency of reporting
– quarterly.
IHP Remuneration
Committee (RemCo)
RemCo supports governance accountability by linking deliverables with remuneration. TCFD and ESS targets were
reviewed in 2024.
Matters considered in 2024
– the committee considered sustainability within the risk, regulation and ESG anchor
against the delivery of which variable remuneration awards are discussed.
Frequency of reporting
– annual.
Management’s role in assessing and managing climate risks and opportunities
Responsibilities and matters considered
IHP Executive
Committee (ExCo)
The IHP ExCo applies the business plans to its business operations in support of the CEO. It is responsible for:
n
identifying business risks, including climate-related change and scenario risk and opportunities assessments;
n
embedding actions into its business plans, supporting emissions data gathering and delivering against targets;
n
monitoring and management of material risks, including those related to climate change; and
n
reviewing the Group’s risk profile for both current and potential future risks, including climate-related risks over
the short, medium and long term and overseeing the mitigation of those risks.
Matters considered in 2024
– the next significant step of the Group’s sustainability agenda.
Frequency of reporting
– ad hoc, as and when necessary.
Sustainability Forum
The Sustainability Forum, comprising members of the Group’s management team, is responsible for supporting and
driving the implementation of the broader sustainability agenda. The Climate Update that is presented to the board
quarterly includes discussions and actions from Forum meetings.
Matters considered in 2024
– incorporating sustainability considerations in the supplier onboarding and ongoing
review process, opportunities for more sustainable choices in the areas of office procurement decisions and office
energy use, employee engagement to embed an awareness of the issues that affect the Group.
Frequency of reporting
– monthly updates are sent to the IHP CEO and designated non-executive director of ESS.
Strategy
We are currently developing a sustainability strategy that we aim to start implementing in financial year 2025. Understanding the climate-related
risks and opportunities is fundamental to shaping our strategy as a responsible business. We are considering the following as part of our
strategy: improvements to our process for identifying, assessing, prioritising, managing and mitigating risks and opportunities including
consideration of geographies and/or sector; determining how climate-related issues serve as an input to the financial planning process and the
time period(s) used; determining the financial impacts of climate related risks and opportunities; further exploration of the prioritisation of
climate related risks and opportunities as well as the link between climate-related risks and principal risks and their impacts and mitigations;
forward-looking climate-related metrics and targets over different time horizons and how they could be incorporated into remuneration policies
and target setting.
Task Force on Climate-related Financial Disclosures (TCFD)
continued
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34
IntegraFin
Annual Report 2024
Scenario analysis
Management conducted its first climate scenario analysis in 2023.
This was based on long-term scenarios and the inputs and outcomes
are not expected to change significantly year on year. Therefore,
unless there is a material change to the business, we plan to update
our scenario analysis every three years, in line with the recommendations
of the UK Government’s Climate-related Financial Disclosures
(CFD) requirements.
The risks and impacts associated with climate change for our Group
will be determined by the global governmental, social and
technological approach to emissions reductions and projected
temperature increase limits.
From a modelling perspective it should be noted that scenarios are
not predictions and reflect a series of assumptions to assess a range
of possible outcomes. Consequently, climate-related scenarios are
currently limited by factors such as simplifications in terms of data
inputs and event outcomes which are likely to influence the range of
potential future impacts. Given the limited level of certainty, we use
scenario analysis as a useful input to assess potential risks and
opportunities at this point.
This review examines three climate scenarios, drawing on the
Intergovernmental Panel on Climate Change (IPCC) representative
concentration pathway (RCP) models and the Financial Stability
Board (FSB) and Network for Greening the Financial System (NGFS)
scenarios. Each scenario represents the modelled increases in global
average temperatures from pre-industrialised levels and the predicted
mitigation approach that would deliver them.
The rationale for the scenarios used was to represent three of the four
quadrants in the NGFS, a network of 114 central banks and financial
supervisors, as shown in the diagram below. These provide a range of
possible outcomes including an orderly, fast transition scenario where
transition risks will be greater and a hot house world scenario where
the physical risks will be more impactful.
NGFS scenarios framework
High
Disorderly
Too little, too late
Transition risks
Orderly
Hot house world
Low
Low
Physical risks
High
Notes to the framework:
A scenario over 3°C has not been included due to the projected global
economic wipe-out over 50% of global GDP above 2.6°C, and economic
annihilation for 4–5°C rise: Winter & Kiehl (2023) Long-term macroeconomic
effects of shifting temperature anomaly distributions Oxford Economics.
NDCs – Nationally Determined Contributions (all current pledged policies even
if not yet implemented and not aligned to global target of 1.5°C).
Figure 3. Summary of climate risks in scenarios
The key facets of each scenario are summarised below.
Climate scenarios considered
Net Zero by 2050
Delayed transition
Nationally
Determined
Contributions
(NDCs)
Assumed global temperature rise
Aligned to RCP 2.6
At least 50%
chance does not
exceed 1.5ºC
Aligned to RCP 4.5
67% chance
to limit to 2°C
Integrated
with RCP 6.0
Likely to limit
to 2.6°C
Key assumptions
Global ambitious
climate policies.
Innovation and
fast technological
changes. Medium
to high use of
carbon dioxide
removal.
After 2030:
n
Global annual
emissions
decrease.
n
Fossil fuel
use starts
declining.
n
Strong climate
policies and
climate taxes
implemented.
Current pledged
policies are
not met.
Technology
change is slow.
Policy change is
slow to be
implemented.
Physical impacts
Acute
Low
Moderate
High
Chronic
Moderate
Moderate
High
Transition impacts
Market and tech
High
High
High
Reputation
Moderate
Moderate
Moderate
Policy and legal
High
High
Moderate
Society
Moderate
Moderate
High
Measuring risks and opportunities
We have measured the climate risks using the Group’s business risk
impact assessment matrix. This assesses the level of impact and
likelihood against five categories: operational disruption, financial
impact, reputational and media interest, regulation and duty of care
to clients.
The climate-related risk on the Group’s corporate risk register is
reviewed every three months to incorporate ongoing refinement and
to ensure the register reflects the risks in the operating environment.
In 2024 we conducted an assessment to consider the materiality of
climate-related risks and opportunities. This assessment will be
updated periodically to where priorities have, or ought to have, shifted.
Time horizons: short, medium and long
Time horizon
Years
Reason
Short term
<2
This is within the Company’s three-year
business planning period.
Medium term
2–12
This covers the end of the Company’s
business planning period and beyond
into what we would consider a
reasonable timeframe to consider
environmental risks and opportunities.
Long term
12+
This is beyond the Company’s strategic
and business planning period but it ties
into the Company’s commitment to be
net zero by 2050.
Divergent
Net Zero
(1.5°C)
Net Zero
2050
(1.5°C)
NDCs
Delayed
transition
Below 2°C
Current
policies
Strategic report
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Financial statements
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35
IntegraFin
Annual Report 2024
Task Force on Climate-related Financial Disclosures (TCFD)
continued
Scenario analysis
continued
Measuring risks and opportunities
continued
Scenario-based risks, materiality and available responses
Specific climate-related scenarios have a longer-term horizon and consequently we have not yet included any financial impacts based on
opportunities in our planning process for this financial year. We have, therefore, largely assessed the impacts of scenarios on a qualitative basis.
The Group’s preferred scenario is an orderly transition to net zero by 2050 as this has the least significant impact on key stakeholders, as shown
in the table below. Our climate-related scenario analysis confirmed that the Group was resilient under all scenarios and that the regulated
entities remained within solvency and liquidity appetites.
The risk assessment related to the external scenarios on the Group has been based on the Group RMF business risk impact assessment matrix.
The most significant scenario-based risks are set out in the table below.
Scenario-based risks, materiality and available responses and resilience:
Low
Medium
High
Potential impact on operations,
strategy and financial planning
Scenario
Potential materiality
of risk by timeframe
Available responses and resilience
Climate-related risk
Map to principal risk
2025
(short
term)
2035
(medium
term)
2050
(long
term)
Physical risks – Acute
The risk of extreme weather
events such as floods and
storms impacting our
operations, damaging our
premises, data centres and
the surrounding
infrastructure or
compromising the safety
and wellbeing of
our employees.
Resilience
Service standard
failure
Risk
Increased costs due to
damages to premises.
Disruption to operations due
to impact on supplier
operations and employees’
ability to travel to office.
Net Zero
by 2050
Inclusion of sustainability
considerations in supplier risk
assessments, developing
contingency plans for all cloud and
data services.
Ongoing investment in IT services
will support further flexibility to
location of working and efficiencies
across the hybrid working model.
Delayed
Transition
NDCs
Physical risks – Chronic
The risk of longer-term
changes in climate patterns
such as higher temperatures
impacting our operations
and employees.
Resilience
Service standard
failure
Risk
Increased costs due to
additional cooling
requirements in offices and
data centres.
Disruption to our own
operations and our suppliers’
due to impact on employees’
productivity.
Net Zero
by 2050
Inclusion of sustainability
considerations in supplier risk
assessments from next year,
developing contingency plans for
all cloud and data services.
Ongoing investment in IT services
will support further flexibility to
location of working and efficiencies
across the hybrid working model.
Delayed
Transition
NDCs
Transition risk – Policy
legal and regulatory
The risk that there is a need
to comply with increasing
legal, regulatory, and
disclosure obligations.
Regulatory
Risk
Increased operating costs
associated with complying
with new rules such as carbon
taxes and increased
disclosure requirements.
Potential for some product
offerings to be restricted or
sanctioned by regulators for
non-compliance.
Opportunity
Decreased operating costs
from reducing our energy use
and delivering operational
efficiencies across our
business.
Net Zero
by 2050
Ongoing regular horizon scanning
of changing compliance
requirements and reviewing
regulatory publications on an
ongoing basis.
Targets have been set to
reduce our carbon emissions
which will lessen the impact of a
carbon tax.
Identifying short-, medium- and
longer-term opportunities to
develop and incorporate
sustainable practices within our
operations.
Delayed
Transition
NDCs
Transition risk – Market
The risk that climate
change or the transition to a
lower-carbon economy
negatively impacts the
global economy, and
therefore the value of
assets on our platform and
in our range of managed
investment solutions.
Market
Risk
Reduced net inflows as clients
react to market volatility.
Decreased revenues from
lower FUD.
Opportunity
Increased market share by
meeting clients’ expectations
of climate-related investments
and platform functionality.
Net Zero
by 2050
Holding a diverse portfolio on the
platform to mitigate regional and
sector market shocks.
Developing Transact and T4A
products to ensure resources are
used to create value for
stakeholders over the long term.
Delayed
Transition
NDCs
Strategic report
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Financial statements
Other information
36
IntegraFin
Annual Report 2024
Low
Medium
High
Potential impact on operations,
strategy and financial planning
Scenario
Potential materiality
of risk by timeframe
Available responses and resilience
Climate-related risk
Map to principal risk
2025
(short
term)
2035
(medium
term)
2050
(long
term)
Transition risk –
Reputational
Poor public perception of
the Group as a result of
inadequate or misleading
disclosure regarding the
Group’s climate strategies.
Competition
People
Risk
Decreased revenues following
loss of clients due to not
meeting stakeholder
expectations in terms of ESG
product offerings and
corporate performance.
Opportunity
Increased market share from
meeting clients’ expectations
of targets, transparency and
corporate behaviours.
Net Zero
by 2050
Developing a sustainability
strategy in 2025 that aligns with
best industry practice.
We have set realistic carbon
emission reduction targets and
regularly monitor progress.
Regular engagement with our
financial adviser base is planned
to understand the expectations of
clients in relation to climate-
related investments.
Delayed
Transition
NDCs
Risk
Risk management is a core part of our corporate culture. Climate-related risks are managed as part of our Group RMF which defines the Group’s
systems of governance, risk appetite and risk management processes. See pages 43 and 44 for more information on our risk management processes.
Understanding and managing the risks
Climate-related risks are identified using scenario analysis and horizon scanning for existing and emerging regulatory requirements. We use
various tools and processes to manage climate-related risks:
n
Climate-related scenario analysis, as described on pages 36 and 37 which looks at climate-related matters arising in the medium and
long-term.
n
The ORSA and ICARA processes for the regulated entities of the Group, which consider impacts in the business planning period using
projection scenarios and stress testing.
n
Quarterly risk and control assessments to review internal controls and available management actions for mitigation.
A key part of our sustainability strategy will be to continue considering how we can embed the identification, managing and monitoring of
climate-related risks and opportunities, including the impacts on our principal risks, over different time horizons into all areas of the business.
Once risks are identified, our risk appetite framework defines the maximum level of residual risk the board is willing to take in pursuit of its
strategic objectives and in the normal course of business. Exceeding risk appetite limits potentially presents a financial or operational threat
to the business which could cause harm to its customers or the firm. Whilst the Group has not set any specific climate-related appetites,
it recognises that existing appetites for operational and financial thresholds may be impacted by climate change matters and therefore
considers root cause, of which climate may be one factor, for any appetite breaches.
Metrics and targets
The Group adopted the reporting requirements of the Streamlined Energy and Carbon Reporting (SECR) policy, as implemented by the UK
Government in 2019. We have been collating Scope 1 and 2 GHG emission data for several financial years and expanded the scope of our Scope 3
emissions reporting in 2023.
With regards to our operational activities, we have reported our greenhouse gas emissions, energy use and carbon intensity ratios on pages 31
and 32. The data collection methodology, assumptions and estimates are outlined on pages 30 and 31.
The table below shows targets that we have committed to and also targets that we are aiming for in the short to medium term, the details
of which are still being considered or developed.
Risk mitigation
Target
Key metric
Timeframe
Status
Mitigate the risk of
harming our reputation
due to not setting
targets to reduce of
emissions as expected
by key stakeholders
We have committed to a carbon reduction target of
60% of direct operational Scope 1 and location-
based Scope 2 emissions against a 2022 base
year.
Carbon emissions
2033
On track – see pages 31
for details.
We commit to reaching net zero emissions by
2050. This covers Scope 1, 2 and 3 carbon
emissions.
2050
We aim to develop a net
zero roadmap over the
medium term.
Ensure resilience
of our suppliers
To ensure the resilience of our suppliers and
alignment with our goals, we want our suppliers to
demonstrate their commitment to environmental
goals by having carbon emission reduction targets.
Number of suppliers with
carbon reduction targets in
place
Not set
Under consideration.
Methodology of setting targets to reduce operational Scope 1 and 2 emissions
We compared the energy footprint of our current London premises to a potential office space 50% smaller and with best practice energy
efficiency to calculate potential energy savings. This criteria was subsequently used in the selection process of the new office. We also
considered the impact of continued use of solar panels at our Australian office and the expected reductions in the UK and Australian national
grids over the next ten years.
Offsetting emissions
We currently do not purchase any carbon credits for offsetting and therefore they are not currently included in any of our metrics or targets.
Strategic report
Corporate governance
Financial statements
Other information
37
IntegraFin
Annual Report 2024
Financial review
*
Alternative performance measures (APMs) are indicated with an asterisk.
APMs are financial measures which are not defined by IFRS. They are used
in order to provide better insight into the performance of the Group. Further
details are provided in the glossary, on pages 149 to 151.
Platform growth driving
strong financial performance
The Group’s platform business continued
to show its strength in attracting and
retaining advised business. The primary
measure of this success was FUD growth,
which was up 17% to £64.1 billion
(FY23: £55.0 billion) as a result of the
benefit of both positive net inflows and
market movements.
Against a backdrop of ongoing high interest rates and higher
cost of living impacting client withdrawals, where the wider
adviser platform sector has faced headwinds, to have robust,
positive net inflows was extremely encouraging.
As a result of the FUD growth, Group revenue also increased
strongly, up 7% to £144.9 million (FY23: £134.9 million).
The Group also continued to grow its market penetration with
platform clients of 234,998 (FY23: 230,294)* and registered
advisers on the platform of 8,048 (FY23: 7,683)*.
Given the Group’s strong liquidity profile, the higher UK
interest rate environment and ongoing interest income
optimisation, net interest income increased by 67% to £10.5
million (FY23: £6.3 million).
The growth in both Group revenue and interest income more
than offset the 14% increase in total administrative expenses
to £85.0 million (FY23: £74.6 million). This was primarily the
result of ongoing investment in staff to reach a level that will
support software development and IT infrastructure projects,
market-leading client service and operational requirements as
the Group continues to grow.
Statutory profit before tax (PBT) rose 10% to £68.9 million
(FY23: £62.6 million), a new record for the Group, and underlying
PBT rose by 12% to £70.6 million (FY23: £63.0 million)*.
The effective tax rate increased to 24% (FY23: 20%) due to the
change in corporation tax rate in April 2023. This resulted in
profit after tax rising by 4%, a slower rate than PBT growth,
to £52.1 million (FY23: £49.9 million).
EPS was 15.7 pence (FY23: 15.1 pence). After removing all
non-underlying expenses in FY24, underlying EPS was
16.2 pence*, compared with 15.2 pence in FY23.
“The ongoing
attraction of the
Group’s investment
platform has driven
record revenue
and PBT.”
Euan Marshall
Chief Financial Officer
Strategic report
Corporate governance
Financial statements
Other information
38
IntegraFin
Annual Report 2024
Operational performance
Platform
FY24
£bn
FY23
£bn
Change
%
Opening FUD
55.0
50.1
+10%
Inflows
8.1
6.4
+27%
Outflows
(5.6)
(3.7)
+51%
Net flows
2.5
2.7
-7%
Market movements
6.6
2.2
+200%
Closing FUD
64.1
55.0
+17%
Average daily FUD for the period
59.6
53.6
+11%
FY24
No.
FY23
No.
Change
%
Platform clients
234,998
230,294
+2%
Platform registered advisers
8,048
7,683
+5%
1
Other movements includes fees, tax charges and rebates, dividends and interest.
FUD closed the year up 17% on FY23 at £64.1 billion.
During FY24, client pressures caused by macroeconomic factors eased and investment sentiment improved. This, combined with the reliability
and quality of our advised investment platform, resulted in gross inflows of £8.1 billion (FY23: £6.4 billion); this was a record for the Group,
in what continues to be a competitive marketplace.
Whilst outflows increased to £5.6 billion (FY23: £3.7 billion), the annualised rate was 10% of opening FUD (FY23: 7%) and as a result are still
within the range observed historically, as a percentage of FUD. Factors driving outflows included clients withdrawing savings, including
increasing pension drawdowns as the cost of living has increased, and supporting one-off purchases for themselves and dependents.
Our net flows of £2.5 billion (FY23: £2.7 billion), or 5% of opening FUD, were strong for the sector.
Back-office technology
At the end of FY24 the number of CURO licence users was 3,098 (FY23: 2,752), an increase of 13%.
Group financial performance
FY24
Group
£m
FY24
Platform*
£m
FY23
Group
£m
FY23
Platform*
£m
Change
%
Group
Change
%
Platform
Revenue
144.9
140.0
134.9
130.1
+7%
+8%
Cost of sales
(3.0)
(2.1)
(3.9)
(2.7)
-23%
-22%
Gross profit
141.9
137.9
131.0
127.4
+8%
+8%
Underlying administrative expenses
(83.3)
(77.4)
(74.2)
(72.1)
+12%
+7%
Credit loss allowance on financial assets
0.1
0.1
(0.1)
—
-200%
—
Non-underlying administrative expenses
(1.7)
0.5
(0.4)
(0.4)
+325%
-225%
Operating profit
57.0
61.1
56.3
54.9
+1%
+11%
Net interest income
10.5
9.6
6.3
5.7
+67%
+68%
Net gain attributable to policyholder returns
1.4
1.4
—
—
—
—
PBT
68.9
72.1
62.6
60.6
+10%
+19%
Tax on ordinary activities
(16.8)
(15.7)
(12.7)
(11.6)
+32%
+35%
Profit after tax
52.1
56.4
49.9
49.0
+4%
+15%
PBT margin
48%
52%
46%
47%
+2%
+11%
EPS – basic
15.8p
17.1p
15.1p
14.8p
+5%
+16%
EPS – diluted
15.7p
17.0p
15.1p
14.8p
+4%
+15%
*
The “Platform” columns represent the activities conducted on Transact and excludes the activities of T4A, the Group’s adviser back-office technology provider.
The T4A activities are included in the Group column. Platform is equivalent to the investment administration services and insurance and life assurance business
segments in note 6.
Strategic report
Corporate governance
Financial statements
Other information
39
IntegraFin
Annual Report 2024
Revenue
There are two streams of Group revenue: investment platform
revenue and back-office technology revenue.
FY24
£m
FY23
£m
Change
%
Platform revenue
Recurring annual charges
126.1
116.1
+9%
Recurring wrapper charges
12.8
12.3
+4%
Other income
1.1
1.7
-35%
Total platform revenue
140.0
130.1
+8%
Back-office technology revenue
4.9
4.8
+2%
Total revenue
144.9
134.9
+7%
Annual commission income and wrapper fee income have been renamed in
FY24 to recurring annual charges and recurring wrapper charges respectively.
Platform revenue
FY24 investment platform revenue increased by £9.9 million to £140.0
million (FY23: £130.1 million). Investment platform revenue comprises
three elements, 99% (FY23: 99%) of which is from a recurring source.
Annual charge income (an annual,
ad valorem
tiered fee on FUD) and
wrapper fee income (quarterly fixed wrapper fees for certain available
tax wrapper types) are recurring. Other income is composed of buy
commission and dealing charges. Buy commission was phased out
during the course of FY24.
Average daily FUD for the year, arising from the performance of the
assets in client portfolios, increased by 11% in FY24 to £59.6 billion.
Annual charge income increased 9% to £126.1 million (FY23:
£116.1 million). The lower increase in annual charge income in
comparison to average FUD resulted from a reduction in the blended
rate annual charge payable by clients. This naturally occurs as a result
of a greater proportion of individual client FUD benefits from
progressively lower fees as portfolios increase in value.
Recurring wrapper administration fee income increased by 4% to
£12.8 million (FY23: £12.3 million), reflecting the increase in the
number of open tax wrappers for both existing and new clients.
Other income fell by 35% to £1.1 million (FY23: £1.7 million). This was
driven by the elimination of buy commission during the financial year,
which started during FY23. The elimination of the buy commission is
an illustration of our responsible pricing strategy, as we seek to
simplify our fee structure.
Back-office technology revenue
FY24 CURO licence revenue was £4.9 million (FY23: £4.8 million), an
increase of 2%. This was driven by an increase in recurring revenue
from additional CURO user licences.
Administrative expenses
Administrative expenses increased by £10.4 million (14%) to £85.0 million.
FY24
£m
FY23
£m
Change
%
Employee costs
58.5
53.9
+9%
Occupancy
3.1
2.8
+11%
Regulatory and professional fees
10.6
9.8
+8%
Other costs
8.9
5.2
+71%
Depreciation and amortisation
2.2
2.5
-12%
Underlying administrative expenses
83.3
74.2
+12%
Non-underlying expenses
1.7
0.4
+325%
Administrative expenses
85.0
74.6
+14%
FY24
No.
FY23
No.
Change
%
Average headcount
666
631
+6%
Period end headcount
666
648
+3%
Employee costs
Employee costs increased by 9% due to a combination of increased
headcount, which grew by 6% from an average of 631 in FY23 to an
average of 666 in FY24, and providing pay rises in order to offer
competitive salaries to our employees.
Occupancy costs/depreciation and amortisation
Occupancy costs increased by £0.3 million, and depreciation and
amortisation reduced by £0.3 million. The increase in occupancy
costs is due to the head office lease ending in June 2023 and
renewing in March 2024. As there was no lease commitment in
the intervening period, this meant that, as per IFRS 16, the leases
accounting standard, depreciation of the right-of-use asset was
replaced by rent expense for the final three months of FY23 and the
first six months of FY24. The lease was renewed for a limited period.
Regulatory and professional fees
Regulatory and professional fees increased by £0.8 million in FY24,
with professional fees increasing by £1.5 million mainly as result of
consultancy work and professional advice relating to discrete
projects, and regulatory fees falling by £0.7 million due to a reduction
in the FSCS levy.
Other costs
Other costs increased by £3.7 million in FY24 mainly due to an
increase in irrecoverable VAT (£0.9 million), caused by higher software
expenses and professional fees , and the movement of tax relief due
to shareholders (FY23: £1.6 million credit) from administrative
expenses to net gain attributable to policyholder returns in FY24, as
noted in the net gain attributable to policyholder returns section
below.
Non-underlying expenses
Non-underlying expenses relate to the deferred consideration
payable as part of the acquisition of T4A, and any other one-off
items considered to not be part of the core underlying business
performance. The T4A post-combination remuneration costs
increased to £2.1 million (FY23: £0.4 million), as FY23 included
a £1.7 million release of the additional consideration, after it was
confirmed that T4A would not meet the minimum threshold for highly
stretching targets to earn this. The cost will reduce to approximately
£0.5 million in FY25, with the final deferred consideration payment
due in January 2025. FY24 also included £0.4 million received from
HMRC for overpaid VAT and interest relating to the FY22 IAD Pty VAT
decision, upon receipt of HMRC’s final calculation of the amount due.
Financial review
continued
Strategic report
Corporate governance
Financial statements
Other information
40
IntegraFin
Annual Report 2024
Interest income
Interest income rose 67% to £10.7 million (FY23: £6.4 million). The
increase was predominantly due to a higher average Bank of England
base rate during the year, higher average corporate bank balances and
ongoing optimisation of corporate cash management.
This resulted in interest income on corporate cash balances and gilt
investments rising to £10.1 million (FY23: £5.6 million). The Group
also generated another £0.6 million (FY23: £0.8 million), being a
combination of interest due from the Vertus loan facility and interest
received from HMRC.
Net gain attributable to policyholder returns
Tax relief due to shareholders was £1.4 million in FY24 and relates
to life insurance company tax requirements and thus is subject to
valuations at year end, which are inherently dependent on market
valuations at that date. Prior to FY24 this was included in
administrative expenses (FY23: £1.6 million).
Underlying PBT and EPS
FY24
Group
£m
FY23
Group
£m
Change
%
Reported PBT
68.9
62.6
+10%
Non-underlying expenses
1.7
0.4
+325%
Underlying PBT
70.6
63.0
+12%
Underlying EPS – basic
16.3p
15.2p
+7%
Underlying EPS – diluted
16.2p
15.2p
+7%
Tax
The Group has operations in three tax jurisdictions: the UK, Australia
and the Isle of Man. This results in profits being subject to tax at three
different rates. However, 96% of the Group’s income is earned in the UK.
Shareholder tax on ordinary activities for the year increased by
£4.1 million, or 32%, to £16.8 million (FY23: £12.7 million) due to the
increase in taxable profit and the increase in corporation tax rate to
25%, with effect from 6 April 2023.
Our effective rate of tax over the period was 24% (FY23: 20%).
Our tax strategy can be found at: https://www.integrafin.co.uk/
legal-and-regulatory-information/.
Dividends
During the year to 30 September 2024, IHP paid a second interim
dividend of £23.2 million to shareholders in respect of financial year
2023 and a first interim dividend of £10.5 million in respect of
financial year 2024.
In respect of the second interim dividend for FY24, the board has
declared a dividend of 7.2 pence per Ordinary Share (FY23: 7.0 pence).
FY24 total dividends paid and declared of £34.5 million compares
with full-year interim dividends of £33.7 million in respect of FY23.
Consolidated Statement of Financial Position
September
2024
£m
September
2023
£m
Change
%
Non-current assets
32.6
30.5
+7%
Current assets
270.0
235.4
+15%
Current liabilities
(47.5)
(27.5)
+73%
Non-current liabilities
(46.8)
(48.5)
-4%
208.3
189.9
+10%
Policyholder assets and liabilities
Cash held for the benefit
of policyholders
1,622.8
1,419.2
+14%
Investments held for the benefit
of policyholders
27,237.8
23,021.7
+18%
Liabilities for linked investment
contracts
(28,860.6)
(24,440.9)
+18%
—
—
—
Net assets
208.3
189.9
+10%
Share capital
3.3
3.3
0%
Share-based payment reserve
4.1
3.4
+21%
Employee Benefit Trust (EBT) reserve
(3.3)
(2.6)
+27%
Other reserves
5.6
5.6
0%
Profit or loss account
198.6
180.2
+10%
Total equity
208.3
189.9
+10%
Net assets increased 10% (FY23: 10%), or £18.4 million, in the year
to £208.3 million, and the material movements on the Consolidated
Statement of Financial Position were as follows:
Current assets
Current assets increased by 15%, or £34.6 million, during the year
to £270.0 million. This was as a result of cash and cash equivalents
increasing by £66.2 million during the year to £244.1 million
(FY23: £177.9 million). This was due to the strong cash flows
generated from operating activities and the maturity of gilts.
This was offset by a decrease in gilt investments of £19.8 million
from £22.3 million to £2.5 million.
We continue to operate without any need for debt, so have not
incurred any increase in financing costs from the increase in base rate
through the year; rather, we benefited due to our strong corporate
cash reserves.
Current liabilities
Current liabilities increased by 73%, or £20.0 million, during the year to
£47.5 million. This was largely due to an increase in the current
provision relating to ILUK policyholder reserves, and the renewal of
the London office lease during the year, resulting in a new lease
liability.
Policyholder assets and liabilities
ILUK and ILInt write only unit-linked insurance policies. They match
the assets and liabilities of their linked policies such that, in their own
individual statements of financial position, these items always net off
exactly. These line items are required to be shown under IFRS in the
Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position and the Consolidated Statement of
Cash Flows but have zero net effect.
Cash and investments held for the benefit of ILUK and ILInt
policyholders have risen to £28.9 billion (FY23: £24.4 billion).
This increase of 18% is entirely consistent with the rise in total FUD
on the investment platform.
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Capital resources and capital management
To enable the investment platform within the Group to offer a wide
range of tax wrappers, there are three regulated entities within the
Group: a UK investment firm (IFAL), a UK life insurance company
(ILUK) and an Isle of Man life insurance company (ILInt).
Each regulated entity maintains capital above the minimum level
of regulatory capital required, ensuring sufficient capital remains
available to fund ongoing trading and future growth. Cash and
investments in short-dated gilts are held to cover regulatory capital
requirements and tax liabilities.
The regulatory capital requirements and resources in ILUK and ILInt
are calculated by reference to economic capital-based regimes, which
are Solvency II for ILUK and the Isle of Man Risk-Based Capital
Regime for ILInt.
IFAL is subject to Investment Firms Prudential Regime (IFPR)
regulatory capital and liquidity rules. These prudential rules require
the calculation of capital requirements reflecting “K factor”
requirements that cover potential harms arising from business
activities. The K factors are calculated using formulae for assets
and cash under administration and client orders handled.
IFAL’s Public Disclosure document contains further details and can be
found on our website at: https://www.integrafin.co.uk/legal-and-
regulatory-information/.
Regulatory capital as at 30 September 2024
Regulatory capital
requirements
£m
Regulatory capital
resources
£m
Regulatory
cover
%
IFAL
60.4
74.8
124
ILUK
229.5
313.1
136
ILInt
26.4
49.0
186
Regulatory capital as at 30 September 2023
Regulatory capital
requirements
£m
Regulatory capital
resources
£m
Regulatory
cover
%
IFAL
33.3
44.4
133
ILUK
215.8
269.2
125
ILInt
27.1
46.6
172
Liquidity
The Group holds liquid assets in the form of cash and cash
equivalents and UK Government securities (‘gilts’), the majority
of which are available with immediate effect. More information can
be found in notes 3, 4, 19 and 21 to the financial statements.
The main uses of liquid assets include:
n
holdings for regulatory and operational purposes, including
risk appetite; and
n
coverage of policyholder returns in the life insurance businesses.
Surplus cash and gilts have increased by £4.8 million during the
financial year.
FY24
£m
FY23
£m
Total Group consolidated cash and UK gilts
242.1
200.3
Less: Group cash and UK gilts held for
regulatory and operational purposes
(118.3)
(89.6)
Less: foreseeable dividend
(23.9)
(23.2)
Less: coverage of policyholder returns in the life
insurance companies
(67.8)
(42.4)
Surplus cash and UK gilts
32.1
45.1
Euan Marshall
Chief Financial Officer
17 December 2024
Financial review
continued
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Annual Report 2024
Risk management
Navigating uncertainty
The inherent risk environment faced by the Group develops over time,
and this year the landscape has been shaped by many factors including
the headwinds of economic, political and geopolitical uncertainty and
the embedding of the all-encompassing Consumer Duty.
Risk management framework
Risk appetite
Our risk appetite is the degree of risk that we are prepared to accept in
pursuit of our strategic financial objectives. The board is responsible
for approving the risk appetite statements, defined both on a
quantitative and qualitative basis.
Risk identification
Risks are captured both through external sources and from top-down
principal risk identification at Group level. Regular discussions with
senior management and risk owners across the Group provide a
bottom-up approach.
Risk assessment and management
We use a robust impact and likelihood scoring approach designed to
ensure the capture of potential harms arising from business activities
and measure these against both appetites and target scores.
This bottom-up scoring approach takes place via an RCSA process
completed on a no less than quarterly basis. We use controls and
management actions to manage risks and bring them within appetite
or to target scores.
Policy governance framework
The IHP Group’s Risk Management Policy provides a high level
direction of the systems of internal controls and policies and
procedures are two of the elements that underpin the internal control
process. Policies are implemented and communicated by managers
and written procedures support the policies. The framework provides
principles and guidance to ensure that ownership, control and
consistency is maintained over all policies.
Risk culture
A culture of risk awareness and risk ownership and accountability
is facilitated through a strengthening training programme to support
better communication, challenge and informed decision making.
This is supported in large part by senior management and the
certification regime and conduct rules which apply to the majority of
employees in the Group. The board sets the tone from the top which
cascades through the subsidiary boards and the members of the
relevant executive committees, into their business areas and functions.
Risk taxonomy
The IHP Group has created a two-tier risk taxonomy to ensure that
a common and stable set of risk categories is used throughout the
business linking in with three control objectives: operations, reporting
and compliance.
Risk reporting
Reporting forms an integral part of the RMF and changes to risk
landscape, new risks, changes to scoring and breaches of limits or
appetite thresholds are escalated through the relevant governance
channels including the executive committees (ExCos), ARCs and
boards. There is also a clear process for the escalation of risk events.
Effective risk management assists the business and board with our
strategic and everyday decision making and our business planning
processes. It encompasses all risks that may prevent us from fulfilling
our strategic objectives, as set out on pages 10 and 11, delivery of
which requires continually enhancing our risk management framework
(RMF) which also supports positive outcomes for all our stakeholders
(defined on page 57).
During the year we have focused on strengthening our risk and control
reflexes and enhancing our risk culture and the approach and quality of
our risk and control self assessments (RCSA) by delivering focused
training across the Group. Focused training delivery will continue
through the coming year as we deliver and embed a new risk
management tool and make further enhancements to other elements
of the RMF including risk taxonomy, risk reporting and risk governance.
“In 2024, we
strengthened our risk
and control reflexes,
ensuring that the
Group remains
resilient and agile in
the face of evolving
market challenges.”
Emma Vernon
Chief Risk Officer
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Governance and the three lines model:
Group risk management framework
The RMF drives a consistent approach to identifying, measuring and controlling risks, forming a continuous and disciplined part of the
evaluation of business opportunities, uncertainties and threats in managing good stakeholder outcomes.
Risk governance
Three lines model
Risk appetite
Risk culture
Risk taxonomy
Risk reporting
Risk identification
Policy governance framework
Risk assessment and management
Risk capital frameworks
More information on the component parts can be found in the next four pages.
Forums/working groups
First line
Business operations
Second line
Group risk management
and compliance
Third line
Group Internal Audit
Subsidiary Executive Committees
Subsidiary ARCs
Subsidiary boards
IHP ARC
IHP Executive Committee
IHP board
Risk capital frameworks
The Company’s regulated subsidiaries fall
under various risk capital regimes. The regimes
are guided by similar underlying risk principles,
albeit the results and reporting requirements
are regime specific.
The regulated subsidiaries are capitalised at
the required regulatory minimum, plus a buffer
defined as part of their capital management,
risk appetite and dividend policies to reduce
potential material harms.
Oversight is provided by management,
regulated subsidiary ARCs and boards to
ensure exposures are adequately identified
and acted upon in a timely manner. We ensure,
through our risk capital frameworks, that our
regulated entities hold adequate capital to
meet obligations. Additionally, the balance
sheets and SCRs are regularly monitored and,
in line with regulatory requirements, reported
to the applicable regulators as required.
For information on our compliance with the
relevant regulatory capital requirements, please
see page 42 in the Financial Review.
The IHP ARC supports the board and is responsible for reviewing and challenging the manner
in which the Group implements and monitors the adequacy of the RMF. The role and activities
of the IHP ARC are set out on pages 61 to 64.
The Group’s regulated entity boards are similarly supported by Audit and Risk Committees
(ARCs). The IHP ARC receives updates at each meeting from the respective Chair of the
regulated entity ARCs on key areas of escalation.
The Group’s RMF is implemented through a “three lines” model, to enable delineation of
responsibility for risk management activities. The “first line” business is responsible and
accountable for managing risks on a day-to-day basis within appetite and in line with risk
policies. This is then combined with oversight, support and challenge from the “second line”
Group Risk Management and Compliance functions, and independent assurance is provided
by the “third line” Group Internal Audit function to form a “three lines” model. Group Internal
Audit provide a bi-annual Group assurance map to the IHP ARC and subsidiary ARCs which
identifies from which line assurance is provided for top risks and the extent of that assurance,
which also informs future Group Internal Audit and others’ annual programme of work.
Risk management framework
continued
Risk management
continued
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Annual Report 2024
Principal risks and uncertainties
Risk
Impact
Mitigation
Competition
The risk that the
Group fails to remain
competitive against its
current peer group and
new market entrants.
n
Weaker than forecast net inflows,
impacting profitability and/or the
medium/long-term sustainability
of the platform
The Group continues to provide exceptionally high levels of
service and can be responsive to client and financial adviser
feedback and demands through an efficient operational base.
The Group also monitors the landscape of its platform competitors,
as well as the trends impacting the financial adviser market. The
Group’s platform service and developments remain award winning.
We make monthly releases to our proprietary platform technology,
which incorporate improvements and new functionality.
We continue to develop our digital platform strategy, expanding our
Transact Online interface allowing advisers direct processing onto
the platform. This is essential to remain relevant and competitive,
improving both functionality and service efficiency and allows the
Group to continue to increase the value for money of our service by
reducing client charges, subject to profit and capital parameters
when deemed appropriate. The Group continues to review its
business strategy and growth potential. In this regard, it primarily
considers organic opportunities that will enhance or complement
its current service offerings to the adviser market.
The Group also continues to support the diversification
of the adviser market through the Vertus scheme which continues
to be successful.
Strategic pillars
1
2
3
Change over year
Risk appetite
The Group’s business
model exposes it to
competitive markets.
This risk is accepted and
the Group’s risk appetite
is aligned with qualitative
and quantitative
measures
Market
The risk of adverse
changes in bond, equity
and property market
values, currency exchange
rates, credit spreads and
interest rates.
n
Depressed equity and bond values
have an impact on the revenue
streams of the platform business
due to a large proportion of
revenue being dependent on FUD
The risk is mitigated through the platform offering a wide variety
of assets which ensures platform revenue is not wholly correlated
with one market. This also enables clients to switch assets in
times of uncertainty. In particular, clients are able to switch into
cash assets, which remain on the platform supported by our top
quartile interest rates. In addition, wrapper fees are not impacted
by market volatility as they are based on a fixed quarterly charge.
The Group invests its corporate assets in cash and high-quality,
highly-liquid, short-dated investments to mitigate exposure to bond
asset value fluctuations.
Strategic pillars
3
Change over year
Risk appetite
The Group’s revenue
model exposes it to
secondary market risk
and this is accepted, with
partial mitigation through
limited fixed fee revenue.
It has limited appetite to
market risk relating to
market risk exposure
through corporate assets
Strategic pillars
Change over year
1
Leading functionality
Increasing
2
Leading service
Reducing
3
Value for money
Stable
B
See Strategy on pages 10 and 11
The board has undertaken a review of the principal risks and uncertainties to the Group
that could undermine the successful achievement of its strategic objectives and threaten its
business model or future performance and considered non-financial risks that could present
operational disruption.
The table below presents the Group’s principal risks and uncertainties together with the related appetite, potential impacts, mitigations and
the risk trend for 2024.
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Principal risks and uncertainties
continued
Risk
Impact
Mitigation
Capital
The risk that the regulated
entities within the Group
do not maintain sufficient
capital resources to meet
their regulatory
requirements,
including covering
unexpected losses.
n
Inability to cover
unexpected losses
n
Increase in regulatory capital
requirements by the regulator
The Group’s regulated entities are subject to various regulatory
regimes including the IFPR and Solvency II. As a result, ICARA and
ORSAs are conducted, which identify potential harms and
sufficient resources and capital is held to cover potential losses
(capital requirements). In addition, the risk appetites are set
in excess to the assessed capital requirement and monitored
against these appetites.
Strategic pillars
3
Change over year
Risk appetite
The Group aims to
maintain capital
resources which are
sufficient in amount
and quality to exceed
regulatory requirements
across its regulated
entities
Liquidity
The risk that the Group
does not have sufficient
available liquid financial
resources to enable it to
meet its obligations as
they fall due, or to meet its
regulatory requirements, or
where the Group can
secure such resources
only at excessive cost.
n
Inability to meet obligations as they
fall due
The Group has controls in place which monitor and maintain
immediately available cash balances across its regulated and
unregulated entities within defined appetite parameters. The
appetite includes the ability to withstand liquidity stresses and
ensure it can meet liabilities as they fall due.
Strategic pillars
3
Change over year
Risk appetite
The Group aims to
maintain liquid financial
resources which are
sufficient in amount
and quality to exceed
regulatory requirements
across its regulated
entities and to ensure
that all payments are met
as they fall due
Service standard failure
The risk that client service
levels reduce resulting in
reduced ability to attract
and retain business.
n
Deterioration in adviser and client
retention rates
n
Weaker than forecast net inflows,
impacting profitability and/or the
medium/long-term sustainability
of the platform
n
Heightened regulatory scrutiny
The Group manages the risk by providing its client
service teams with extensive initial and ongoing training,
supported by experienced subject matter experts and managers.
Monitoring service metrics allows the Group to identify areas
where there is deviation from expected service levels or where
processing backlogs have arisen and deliver targeted remediation
plans to ensure client outcomes and service standards are
maintained.
The Group also conducts satisfaction surveys to ensure
service levels are still perceived as excellent by our clients
and their advisers.
Strategic pillars
2
Change over year
Risk appetite
The Group has limited
appetite to compromise
service levels below
market-leading standard
People
The risk that the Group fails
to attract, retain, motivate
and develop its talent,
hindering its ability to meet
its strategic goals.
n
Employees leave due to a lack of
engagement, motivation or
effective management
n
Increased difficulty in recruiting
individuals with the required talent
into the Group
n
Lack of training and development
result in deterioration in client
service standards and/or limit
career progression opportunities
for employees
The Group aims to minimise the level of retention risk through the
promotion of a culture of inclusion and empowerment, underpinned
by: robust HR policies and procedures, focused on effective people
management; annual engagement surveys; performance-based
variable remuneration; succession planning; and talent mapping.
The Group aims to minimise the level of recruitment risk
through having fair and inclusive recruitment practices in place,
completing an annual remuneration review to ensure that
remuneration is consistent with the market and providing
opportunities for career progression.
The Group aims to minimise the level of training and development
risk through the implementation of ongoing competency-based
training programmes, supporting employees in obtaining external
qualifications and having a robust regulatory training programme
in place.
Strategic pillars
1
2
Change over year
Risk appetite
The Group seeks to avoid
this risk in order to
achieve its strategic
objectives
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Risk
Impact
Mitigation
Resilience
The risk that the Group
fails to absorb, anticipate,
adapt to or recover from
shocks or stresses to
its operations and
business processes.
n
Harm to clients, market and the
Group if there is an inability to
recover from a shock or stress,
particularly impacting important
business services
n
Financial penalties and/or
regulatory censure
n
Reputational damage
Process: A variety of control approaches are in place to mitigate
process failure risk including process ownership, proactive
continuous risk management to identify and manage critical
processes, scenario-based resilience plans and testing. Critical
processes are designed to be fault tolerant, allowing elements to be
replaced or changed without impacting the overall service.
Internal technology: The use of several industry standard
approaches to achieve this including resilience by design,
proactive monitoring, incident/change/problem
management processes, scenario planning and testing
and continuous improvement.
Supplier/third party: Third party providers are selected through
a robust RFP process that carries out diligence checks and
establishes reporting/operational practices across all appropriate
risk areas. Onboarded third party providers are managed
on a continuous basis within a vendor management framework.
Strategic pillars
2
Change over year
Risk appetite
The Group aims to
maximise resilience with
respect to identified
critical operational and
business services
Information security
Risk of unauthorised
access, use, disclosure,
disruption, modification, or
destruction of information
assets.
n
Client and/or employee harm
leading to regulatory censure and/
or fines including from the
Information Commissioner
Office (ICO)
n
Harm to clients and the Group
if there is an inability to
recover operations
n
Reputational damage
Information security risk is mitigated using a defence in-depth
approach in alignment with industry standards, incorporating
technical controls and processes and educating our people, all of
which is managed and overseen by dedicated personnel.
Strategic pillars
2
Change over year
Risk appetite
The Group accepts
exposure to elements of
risk as a result of
providing access to its
platform and services
over a public network
Regulatory
The risk that the Group
fails to comply with
regulatory requirements.
n
Poor client outcomes
n
Regulatory fines and/or censure
n
Reputational damage
The Group has an established Compliance function that analyses
regulation and advises on and monitors how our financial services
regulatory standards are met.
The financial services regulated entities in the Group ensure
regulatory standards are met through a framework of policies,
procedures, governance, training, horizon scanning, monitoring and
engagement with our regulators.
Cross-departmental projects are established to deliver significant
regulatory changes, with Group Internal Audit undertaking reviews
during the project phases and/or post-implementation thematic
reviews.
Strategic pillars
2
3
Change over year
Risk appetite
The Group aims to
comply with regulatory
requirements across the
jurisdictions in which it
operates at all times
Financial crime
The risk of failure to
protect the Group and its
clients from financial
crime, including internal
and external fraud,
money laundering, terrorist
financing, sanctions
violations and market
abuse.
n
Loss of client assets resulting in
client harm
n
Loss of corporate assets
as a result of inadequate
financial controls
n
Regulatory censure and/or
penalties as a result of facilitating
financial crime
n
Reputational damage
The Group has a dedicated Financial Crime Compliance team and
a framework of policies, processes and controls in place to reduce
the likelihood of the Group being used to further financial crime.
Key controls include client and supplier due diligence, bank
account verification, segregation of duties, mandatory staff
training and monitoring of activity on the platform.
Strategic pillars
1
2
3
Change over year
Risk appetite
The Group aims to
minimise its exposure
through continuous
improvement to control
and monitoring processes
Strategic pillars
1
Leading functionality
2
Leading service
3
Value for money
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Emerging risks and changes to the risk landscape
Through formal quarterly risk and control review meetings with risk owners and other business
stakeholders, attending industry events and reviewing external sources, emerging risks and
changes to the risk landscape are identified.
These emerging risks and landscape changes by their nature have uncertainty of likelihood and impact on the business, and previously identified
risks and are reported and assessed, both at the executive level and, no less than quarterly, at ARCs and, where appropriate, boards. As the
landscape evolves, emerging risks may cease to be relevant, be superseded or migrate to the risk register.
Emerging risks landscape changes discussed during 2024 have included:
Title and time horizon
Detail
Relevant strategic pillar
UK elections and change of government
Time horizon: near (next 12 months)
For much of the year the impact of the likely
change in government meant that future policy,
regulatory and legislative agendas were
uncertain. However, there was an expectation
that there was a likelihood of a range of changes
that could impact client investing behaviour,
personal taxation and corporate taxation.
Considerations that could have impacted the
Group included potential changes to pension
relief, lifetime pension allowance and changes to
employment rights. Their impact on relevant risks
were assessed and closely monitored, with
relevant actions taken.
1
2
3
Escalating geopolitical tensions
Time horizon: ongoing
Ongoing conflicts around the world have the
possibility to impact markets, resource security,
supply chains, the macroeconomic environment
and consumer behaviour and confidence as well
as increasing the risk of cyber attacks,
particularly state sponsored or politically
motivated cyber attacks.
1
2
3
Generative Artificial Intelligence
Time horizon: ongoing
Generative AI is a constantly evolving opportunity
and risk for the Group. Key areas include business
proposition and competitive advantage,
workforce education, cybersecurity, workforce
impact, data protection and IP risk as well as
many ethical and social implications. In order
to harness the benefits of AI whilst effectively
managing the associated risks it presents to the
Group and society, our people must be AI
informed; AI awareness training is a core part
of AI adoption alongside active monitoring of AI
societal, ethical or industry impacts.
1
2
3
Strategic pillars
1
Leading functionality
2
Leading service
3
Value for money
The directors have carried out a robust assessment of the principal and emerging risks facing the Group, including those that would threaten its
business model, future performance, solvency or liquidity. Details of the results and conclusions of this assessment can be found in the Going
Concern and Viability Statement section on pages 49 and 50.
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Annual Report 2024
Going concern and viability statement
The Strategic Report sets out the Group’s business model, its strategic objectives and the
associated risks, and the annual Financial Review on pages 38 to 42
Going concern is assessed over the
12-month period from when the Annual
Report is approved, and requires the board to
conclude that the Group has adequate
resources to continue its operations and
meet its liabilities as they fall due over the
next 12 months.
As detailed in the going concern disclosure in
the financial statements, on page 114, this is
supported by:
n
the current financial position of the Group;
n
detailed cash flow and working capital
projections based on the Group’s
business plan; and
n
stress testing, including consideration
of regulatory liquidity and capital
requirements, taking account of principal
risks and possible adverse changes in both
the economic and geopolitical climate.
The board has concluded that the Group has
adequate resources to continue its operations,
including operating in surplus of the regulatory
capital and liquidity requirements imposed by
regulators, for a period of at least 12 months
from the date this Annual Report is approved.
For this reason, they have adopted the going
concern basis for the preparation of the
financial statements.
Viability statement
In accordance with provision 31 of the Code,
the board has assessed the viability of the
Group. The directors confirm that they have a
reasonable expectation that the Group will
continue to meet its liabilities as they fall due
over the period of the assessment.
The directors’ assessment has been made
with consideration and reference to the
Group’s current position and three-year
business plan; the Group’s risk appetite; the
Group’s financial projections; the Group’s
principal risks and uncertainties; and stress
testing relating to uncertainty caused by the
economic climate globally and in the UK as
well as geopolitical uncertainty.
The key factors affecting the Group’s viability
and prospects are its growth in the market in
which it operates, market position and
recurring revenue.
Market growth
As discussed in the Market Overview section
of the Strategic Report, the adviser platform
market, upon which the Group derives the
majority of its revenue, continues to benefit
from secular growth tailwinds; sector analyst
publication Fundscape predicts a five-year
CAGR of 13% in the retail advised platform
market in their realistic scenario in their latest
forecasts from November 2024.
Market position
Market position can be assessed as follows:
independent research consistently rates
Transact as the top platform in the market
(page 9); the number of advisers using the
platform increased by 5% during the year; the
number of clients on the platform increased
by 2%; and our Net Promoter Score remained
the highest score for an adviser platform.
The above measures all demonstrate adviser
and client satisfaction with the service provided.
Recurring revenue
The absolute level of revenue is dependent
on market values, but key to the recurrence is
the retention of FUD. The T4A business also
has a level of recurring business through
repeat and long-term contracts to provide
the CURO service. Maintaining the recurring
revenue base across these activities is
achieved through retaining clients and
advisers through our service delivery.
99% of platform revenue is of a recurring
nature (page 40).
Our approach is to focus on organic growth
of FUD through positive net flows to the
platform. We aim to generate growth of
revenue and to control costs, to ensure that
the Group’s profit margin is resilient over the
medium term.
Assessment period and
measures
It is the board’s view that a three-year time
horizon is an appropriate period over which
to assess its viability and prospects, and to
execute its business plan. This assessment
period is consistent with the Group’s current
business plan projections and the ICARA
process and ORSAs of the Group’s regulated
entities. Consideration is also given to
projections beyond this period, though this
does not form part of the formal assessment.
The strategy and business plan is approved
annually by the board and updated as
appropriate. It considers the Group’s ongoing
ability to attract and retain clients and
advisers, net inflows, market growth,
profitability, cash flows, capital requirements,
dividend payments, and other key variables
such as liquidity and the solvency
requirements of the regulated entities.
The business plan is also considered under
stress and scenario tests, to ensure the
business has sufficient flexibility to withstand
such impacts by adjusting its plans within the
normal course of business and also identify
appropriate management actions, if
necessary, during periods of stress.
The stress and scenario tests applied are
severe, yet plausible, at both an individual and
combined level. We recognise the importance
that climate change may have on our business
and our approach for the current financial year
towards climate-related scenarios is set out in
our TCFD disclosures on pages 33 to 37.
The key scenarios considered by the board
are as follows:
Cyber extortion
A threat actor gains network access, leading
to data being stolen and the execution of
ransomware. This leads to reputational
damage, client compensation and fines.
Undetected bug after system
development
A system release with a missed requirement
goes undetected for a period of time which
causes client transactions to be executed
incorrectly. This leads to significant system
development resource requirement to
correct the issue, as well as reputational
damage, client remediation/compensation
and fines.
Persistent high inflation and
continued market uncertainty
Continued market uncertainty and a return
to high inflation for an extended period, in
addition to geopolitical instability that
depresses markets for a prolonged period,
result in a loss of confidence in capital and
investment markets. Consequently, there
is a detrimental effect on revenues.
UK extreme and prolonged
heatwave
Extreme heat in the UK results in the
disruption in services of a material outsourced
supplier and reduction in ability of employees
to effectively service clients. The impact on
service and communication leads to
reputational damage, client compensation
and fines.
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Annual Report 2024
Assessment period and measures
continued
Unforeseen customer harms as a result of a systemic
process failure
Failure by our UK-regulated entities to appropriately identify,
implement or embrace appropriate conduct standards which causes
consumer harm. This leads to reputational damage, client
compensation and fines.
Combined scenario
This scenario considers the impact of a combination of the cyber
extortion and persistent high inflation and continued market
uncertainty scenarios.
To illustrate the severity of the scenarios modelled, the following
table sets out some of the key changes in parameters made in the
scenarios. The most severe scenarios modelled assumed a number
of these changes occurred within the same scenario during the
business planning period.
Assumptions underlying the stress scenarios
Risk factor
Stress applied to base case assumption
Market downturn
A market fall of 33% over a one-month period.
Mass lapse
A 30% drop in the number of clients over
three months.
Increase in outflows
A 95% increase in outflow rates for up to
12 months.
Decrease in inflows
A 30% decrease in inflow rates for 12 months.
One-off spikes in
operating costs
Up to £15.0 million one-off spike in operating
costs depending on the underlying
stress scenario.
Expense increase
An expense increase over the business
planning period of 10%.
The results of the above stress and scenario tests led to the following
conclusions. The assessment was made considering the Group’s the
three-year business planning period:
n
no liquidity issues are expected to arise in the Group; and
n
each of the Group’s regulated entities has sufficient available
capital to cover their regulatory solvency requirements.
Non-financial and sustainability information statement
The Strategic Report includes non-financial information required in accordance with section 414CB
of the Companies Act 2006. The most directly relevant non-financial information is signposted
below; however, the Strategic Report does touch on these topics briefly in other sections:
S.414CB requirement
Relevant Strategic Report section
Environmental matters
Responsible Business - Environmental matters and climate change, pages 30 to 32
TCFD Disclosures, pages 33 to 37
Employees
Responsible Business – People and Culture , pages 26 and 27, Community, pages 28 and 29,
Nomination Committee Report, pages 65 to 67
Social and community
Responsible Business – People and Culture , pages 26 and 27, Community, pages 28 and 29
Human rights
Responsible Business – Community, page 29
Anti-bribery and corruption
Responsible Business – Community, page 29
Business model
Strategy and Business Model, pages 8 to 11
Principal risks and how they are managed
Risk Management, pages 43 to 48
Non-financial key performance indicators
Strategy and Business Model, pages 8 to 11, Key Performance Indicators, pages 12 to 13
Approval of the Strategic Report
A statutory requirement of the Annual Report is that the directors produce a Strategic Report.
Section 172 of the Companies Act states that the purpose of the report is to inform members of the Company and help them assess how the
directors have performed their duty. To fulfil this, directors must act in a way they consider, in good faith, would be most likely to “promote the
success of the Company for the benefit of its members as a whole”.
The Strategic Report should provide shareholders with a comprehensive and balanced overview of the Group’s business model, strategy,
development, performance, position and future prospects. The Strategic Report should be clear, concise and unambiguous, and should
demonstrate how the Company has considered the interest of employees, and the impact of the Company’s operations on the community
and environment.
The directors believe that the Strategic Report on pages 1 to 50 meets all relevant statutory objectives and requirements.
By order of the board,
Helen Wakeford
Company Secretary
17 December 2024
Going concern and viability statement
continued
Strategic report
Corporate governance
Financial statements
Other information
50
IntegraFin
Annual Report 2024
Strategic report
Corporate governance
Financial statements
Other information
51
IntegraFin
Annual Report 2024
Chair’s introduction
On behalf of the board, I am pleased to present
the report setting out the Group’s corporate
governance arrangements, which reflect the
standards required by the 2018 UK Corporate
Governance Code (the ‘Code’).
The Group’s purpose is to make financial planning easier through the
provision of efficient financial adviser software, personal service and
value for money. Proportionate and effective governance facilitates
the Group in the overall delivery of that purpose whilst providing
assurance and accountability to all our stakeholders that their
interests are paramount.
We continue to abide by the overriding principles of the Code which
are designed to:
n
promote long-term sustainable success of the Company, business
effectiveness, efficiency, responsibility and accountability.
Further details relating to this are set out in the long-term
consequences of decisions section in the Companies Act
Section 172 statement, on page 21;
n
provide suitable opportunity for employee engagement in the
business. Further details relating to this are set out in the
interests of the Group’s employees section in the Companies Act
Section 172 statement, on page 20;
n
assist the effective review and monitoring of the Group’s activities;
n
help identify and mitigate significant risks to the Group, as set out
in our Risk Report on pages 43 to 47; and
n
provide the necessary disclosures to stakeholders to make a
meaningful analysis of the Group’s business activities and its
financial position.
Statement of compliance
The Code sets out the principles and provisions relating to good
governance of UK listed companies and can be found on the FRC’s
website at www.frc.org.uk.
The Company has, throughout the year ended 30 September 2024,
applied the principles, and complied with the provisions, of the Code
except in relation to the following:
Provision 36:
The Company’s remuneration structure has adopted
a vesting period for deferred bonus shares of three years, rather than
the Code’s recommended five years. Minimum shareholding and
post-employment shareholdings requirements are in place for
executive directors as recommended by the Code. The Company
believes that the executive directors are sufficiently invested in the
Company’s long-term success and that further restrictions are not
currently required.
Provision 38:
The Company’s Remuneration Policy allows all
employees, including executive directors, the option annually to have a
portion of their cash bonus contributed into their pension. This does not
comply with the Code’s requirement for directors that only basic salary
should be pensionable. However, none of the executive directors
currently take advantage of this provision in the Remuneration Policy.
The Company does not intend to change its policy on pension sacrifice
for the directors at this time as the arrangement is consistent with the
Group’s pension policy applicable to all employees.
The board is, however, proposing a new Directors’ Remuneration Policy
this year which, if approved at the AGM, will comply with these provisions.
Richard Cranfield
Chair
17 December 2024
Strategic report
Corporate governance
Financial statements
Other information
52
IntegraFin
Annual Report 2024
Governance dashboard
Principles of the Code
1. Board leadership and Company purpose
Page
Chair’s introduction
52
Our board
54 and 55
Purpose, values and strategy
10 and 11
Culture
26 to 29
Board stakeholder engagement and decision making
14 to 18, 57
Key performance indicators and strategic performance 12 and 13
Risk assessment
43 to 47
Risk management
43 to 47
Rewarding our workforce
26 to 29, 68 to 94
2. Division of responsibilities
Our board and governance structure
56
Independence and time commitments
56
Committee reports
60 to 94
Board and Committee meeting attendance
58
3. Composition, succession and evaluation
Page
Our board
54 and 55
Our board and governance structure
58 and 59
Board and Committee meeting attendance
58
Nomination Committee Report
65 to 67
4. Audit, risk and internal control
Board Audit and Risk Committee Report
60 to 64
Statement of Directors’ Responsibilities
98
Risk management
43 and 44
Principal risks and emerging risks
45 to 47
Going concern
49 and 50
Viability statement
49 and 50
5. Remuneration
Directors’ Remuneration Report
68 to 94
Board composition as at 30 September 2024 (including Jonathan Gunby)
Gender
Ethnicity
Board composition
Tenure
Female – 33%
Male – 67%
White – 89%
Mixed/Multiple
ethnic groups – 11%
Executive directors – 44%
Independent non-executive
directors (including the
Chair) – 56%
0-3 years – 11%
3-6 years – 45%
6-9 years – 22%
9 years+ – 22%
Jonathan Gunby stepped down from the board on 30 September 2024 but is included in these reports as he was a director at the end of the financial year.
Board skills matrix disclosure (number of directors)
Executive/Senior Management
Committee Experience
Actuarial
Asset/Fund Management
Audit
Legal/Compliance/Governance
Technology
Insurance
Customer Outcomes
Financial Management
Treasury
People Leadership
Risk Management
Regulation
Operations
Outsourcing/Third party Management
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53
IntegraFin
Annual Report 2024
Board of directors
An experienced board
Richard Cranfield
Non-Executive Chair
Appointed to the board:
26 June 2019
Skills and expertise:
Richard is a qualified solicitor and has an MA in Economics
and Law from Cambridge University. His previous experience
includes working for Allen & Overy LLP (and its predecessor firm)
between 1978 and 2022, being a partner from 1985 to 2021.
External appointments:
Henderson High Income Trust Plc – Non-Executive Director,
from 2020.
Alexander Scott
Chief Executive Officer (CEO)
Appointed to the board:
11 February 2014
Skills and expertise:
From November 2010 Alexander was Chief Financial Officer and
Head of Risk, becoming a director in July 2011. Alexander
became Chief Executive Officer in March 2020.
Alexander has a BSc in Actuarial Science from City University
and is a Fellow of the Institute of Actuaries.
External appointments:
None
Euan Marshall
Chief Financial Officer (CFO)
Appointed to the board:
3 January 2024
Skills and expertise:
Euan is a qualified accountant and has over 20 years of financial
services experience. Previously Euan held the role of CFO at CMC
Markets plc. He joined CMC Markets in 2011 and has held roles
including Head of Finance, prior to becoming CFO in 2019.
His experience prior to CMC Markets includes work at Barclays,
HSBC, and Deloitte.
Euan holds a BSc in Economics and Econometrics from the
University of Nottingham and is a CIMA member.
External appointments:
None
Michael Howard
Executive Director
Appointed to the board:
11 February 2014
Skills and expertise:
Michael co-founded the Group in 1999, was Executive Chair
of the Group from 2001 until stepping down in October 2017
and becoming an Executive Director. He founded ObjectMastery
in Australia in April 1992, which developed the software
which underpinned the creation and development of the
Transact platform.
Michael holds a BA in Economics from York University
and is a qualified chartered accountant.
External appointments:
None
N
N
R
A
Audit and Risk Committee
N
Nomination Committee
R
Remuneration Committee
Committee Chair
Board changes during
the year
Christopher Munro, Independent
Non-Executive Director
Resigned from the board: 15 July 2024
Jonathan Gunby, Executive Director
Resigned from the board:
30 September 2024
Euan Marshall, Executive Director
Appointed to the board: 3 January 2024
Key
Board leadership and
Company purpose
Our purpose, values and strategy
are set out on pages 10 and 11 and
describe the Company’s focus.
The board’s focus is to ensure that the
Group delivers long-term sustainable
value for all stakeholders.
To deliver this the board oversees
the maintenance of a sound system of
internal controls and continually
reviews the overall effectiveness of the
Group’s risk management systems.
The board also oversees the Group’s
culture to ensure it is aligned with
the Company’s purpose, values
and strategy.
Strategic report
Corporate governance
Financial statements
Other information
54
IntegraFin
Annual Report 2024
Caroline Banszky
Independent Non-Executive Director
Appointed to the board:
22 August 2018
Skills and expertise:
Caroline is a qualified Chartered Accountant, having
originally trained at what is now KPMG. Her previous
experience includes being Chief Executive of The Law
Debenture Corporation plc between 2002 and 2016,
Chief Operating Officer of SBV Holdings PLC (now Novae
Group plc) between 1997 and 2022, Finance Director
of N M Rothschild & Sons Limited between 1995 and 1997,
non-executive director and chair of A&CC for 3i Group plc
between 2014 & 2023 and member of Investment
Committee of Open University between 2016 & 2024.
External appointments:
Gore Street Energy Storage Fund plc – Chair of Audit
Committee, from 2018
Victoria Cochrane
Senior Independent Non-Executive Director and Designated Non-Executive Director for ESS
Appointed to the board:
28 September 2018
Skills and expertise:
Victoria is a qualified Solicitor, with over 20 years’ experience
as General Counsel and latterly as Global Head of Risk.
Victoria’s previous roles include being Non-Executive
Director of Perpetual Income and Growth Investment Trust
plc between 2015 and 2020; Non-Executive Director of
Gloucester Insurance Ltd between 2008 and 2013; Global
Executive Board Member of EY between 2008 and 2013;
Executive Board Member of EY (NEMIA and UK) between
2006 and 2009; and, Senior Adviser at Bowater Industries Ltd
between 2014 and 2015.
External appointments:
DTEK Group – Advisory Council Member, from March 2024
Confederation of British Industries – Non-Executive
Director, from 2023
Ninety one plc – Chair of the Audit and Risk Committee,
from 2019
Euroclear Bank SA/NV – Non-Executive Director, from 2016
Rita Dhut
Independent Non-Executive Director and Designated Non-Executive Director for Employee Engagement
Appointed to the board:
22 September 2021
Skills and expertise:
Rita has a BSc in Business Studies from City University.
Her previous experience includes various positions at
Aviva Investors between 2001 and 2012, including Head
of European Equities and Head of Pan European Equity
Value Investing; and various positions at M&G between
1994 and 2000, including Director of European Equities.
External appointments:
JP Morgan European Investment Trust Plc – Non-executive
director, from 2019 and Chair from 2022
Ashoka India Equity Investment Trust Plc – Non-executive
director, from 2018
UK Research and Innovation – non-executive director
from 2024
Robert Lister
Independent Non-Executive Director
Appointed to the board:
26 June 2019
Skills and expertise:
Robert has a BA in Classics from Oxford University.
His previous experience includes Non-Executive Director
of Credit Suisse Asset Management (UK) Limited, between
2012 and 2022; Director of Aberdeen Smaller Companies
Income Trust PLC, between 2012 and 2022, Non-Executive
Director of Investec Wealth and Investment Limited
between 2010 and 2020; Director of Rensburg Sheppards
PLC, between 2008 and 2010, as well as working for
Dresdner Kleinwort Wasserstein between 1998 and 2008
and Barclays de Zoete Wedd between 1983 and 1998.
External appointments:
The Salvation Army International Trustee Company
– Director from 2016
A
A
A
A
N
N
N
R
R
R
Strategic report
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Financial statements
Other information
55
IntegraFin
Annual Report 2024
The role of the board and its responsibilities
The role of the board
The board recognises the importance of
a clear division of responsibilities between
executive and non-executive roles and, in
particular, a clear delineation of the Chair’s
responsibility to run the board and the CEO’s
responsibility for running the Group’s
business. The roles of Chair, CEO and
Senior Independent Director (SID) are clearly
defined and have been reviewed and
approved by the board. The allocation
and division of responsibilities is available
on our website here: https://www.integrafin.
co.uk/corporate-governance/.
Matters reserved for
the board
The board is the main decision making
and review body for the Company.
It determines the overall strategic direction
of the Company and is responsible for the
overall management of the Company and the
business operations for its subsidiaries.
The board’s remit is documented in its terms
of reference which include details of matters
reserved for the board and matters delegated
by the board. The terms of reference are
reviewed and updated annually. Matters
which are reserved for the board include
strategy and management, structure and
capital, financial reporting and controls,
internal controls, material contracts,
communication, board membership and
appointments, remuneration and corporate
governance matters. The board determines
which matters are delegated to committees
of the board and the management team.
Independence and
time commitment
All of the non-executive directors are
considered to be independent, and the Chair
was considered to be independent on being
appointed to the role. There are a number
of ways in which the independence of
non-executive directors is safeguarded and in
which their time commitments are considered:
n
meetings between the Chair and
non-executive directors without
management present occur regularly;
n
the SID meets at least annually with each
non-executive director to discuss
feedback on the Chair’s performance;
n
non-executive directors’ tenure on the
board is reviewed annually by the
Nomination Committee (NomCo) as part
of board succession planning;
n
any external commitments must be
disclosed to the board as and when they
arise for consideration and approval
before accepting; and
n
when making new director appointments,
the board takes into account other
demands on the director’s time.
The board has reviewed the other
commitments of the non-executive
directors and concluded it is satisfied that
each remains able to commit sufficient time
to dedicate to their role as a director.
Conflicts of interest
The Company’s Articles of Association
permit the board to consider and authorise
situations where a director has an actual, or
potential, conflict of interest in relation to the
Group. The Company maintains a conflicts of
interest register, which is reviewed annually
by the NomCo and the board.
In addition, prior to each board meeting, the
directors are asked to declare any conflicts
they may have with regard to the business
meeting. Directors who declare a conflict of
interest may be authorised by the rest of the
board to participate in decision making in
accordance with section 175 of the
Companies Act 2006.
The board considers and, if appropriate,
authorises any conflicts or potential conflicts
of interests of directors and imposes any
limitations, qualifications or restrictions as
required or as recommended by the NomCo.
Subsidiary governance
The Group’s regulated principal operating
subsidiaries carry out their business of
providing investment and life insurance
activities. Each of the boards of IFAL,
IntegraLife UK Limited (ILUK), and IntegraLife
International Limited (ILInt) is comprised of a
mix of executive and non-executive directors
in line with UK (IFAL and ILUK) and Isle of
Man (ILInt) regulatory requirements. In each
case the membership of the board is made
up of a mix of skills and experience relevant
to the board, resulting in membership
composed of both members with cross
directorships within the Group, and members
who are independent of any other Group
appointment. We believe that this delivers
the optimum governance to each entity.
The board and committee governance
framework of the main regulated operating
subsidiaries is outlined below:
Each operating subsidiary ARC is responsible
for overseeing the internal controls and risk
management systems for their respective
subsidiary and reporting assurances up to
the IHP ARC annually that these systems
remain effective.
More details of how the board fulfilled its
s.172(1) duties in relation to this decision is
noted in the “Principal Decisions” section on
page 21. Further information on how the
Nomination Committee has been involved in
subsidiary board composition and
succession planning under the new structure
is outlined on pages 66 and 67.
IFAL
Board
ILUK
Board
ILInt
Board
IAD
Board
ISL
Board
T4A
Board
IFAL
Audit and
Risk Committee
ILUK
Audit and
Risk Committee
ILInt
Audit and
Risk Committee
IHP
Nomination
Committee
IHP
ExCo
IHP
Remuneration
Committee
IHP
Audit and Risk
Committee
IHP
Board
Strategic report
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Other information
56
IntegraFin
Annual Report 2024
Key board activities during the year
Business performance
and strategy
n
Consider current and future
business initiatives
n
Approval of the Group strategy
including review of business plans
and pricing strategy and monitoring
performance against strategy
n
Review Transact, T4A and wider
industry market performance updates
n
Review quarterly investor relations
updates including analyses of
Company share price performance
n
Receive updates on and discuss
IT infrastructure and systems
and IT strategy
n
Analysis of recent developments in
platform markets
Link to strategy
1
2
3
Link to stakeholders
1
2
3
4
5
6
Risk management controls
n
Receive assurance from the boards
of the relevant UK subsidiaries that
they had implemented the measures
required to meet the regulator’s
expectations of firms’ oversight of
the implementation of firms’
compliance with the Consumer Duty
by 31 July 2024
n
Receive updates from the IFAL board
that it has approved the ICARA
n
Review quarterly risk reports
n
Approve Group’s RMF, Risk
Management Policy and Risk
Appetite framework
n
Receive training
n
Oversight of enhancements to risk
and control environment
Link to strategy
1
2
Link to stakeholders
1
3
4
6
Finance and reporting
n
Review quarterly and half-year results
n
Monitor performance and capital
position against budget
n
Approve Annual Report and
financial statements
n
Review and approval of dividend
payments in accordance with the
Group’s dividend policy
n
Review and approve Group
tax strategy
n
Review the Group’s ongoing internal
capital management. During the year
IHP plc made an additional
investment of £15 million into IFAL
n
Review and monitor business plans
and projections, including ongoing
review of business performance and
comparison to market consensus on
business performance
Link to strategy
1
3
Link to stakeholders
2
3
4
Sustainability and
stakeholder engagement
n
Quarterly updates on
environmental matters
n
Review board Diversity Policy
n
Receive HR updates including
monitoring culture and employee
survey feedback
n
Review shareholder feedback from
engagement sessions with Chair,
Remuneration Committee Chair
and Company Secretary
Link to strategy
1
2
3
Link to stakeholders
1
2
3
4
5
6
Governance
n
Review board evaluation results
and progress of prior year’s
evaluation actions
n
Annual review of policies including
whistleblowing, anti-bribery and
corruption policy and modern
slavery statement
n
Receive board committee updates
n
Approve AGM documentation
Link to strategy
2
Link to stakeholders
2
3
4
Strategic pillars
1
Leading functionality
2
Leading service
3
Value for money
B
See Strategy on pages 10 and 11
Our stakeholders
1
Our clients and advisers
2
Our employees
3
Our regulators
4
Our shareholders
5
Our suppliers
6
Our communities
B
See Stakeholder engagement
on pages 14 to 18
Strategic report
Corporate governance
Financial statements
Other information
57
IntegraFin
Annual Report 2024
Composition, succession and evaluation
Board composition
During the majority of the year the Company
had four executive directors (including
Jonathan Gunby who resigned from the board
on 30 September 2024) and five independent
non-executive directors (excluding the Chair
but including Christopher Munro who resigned
from the board on 15 July 2024 ).
For the majority of the year the Board will
meet the Code requirement that at least
fifty per-cent of the board (excluding the
Chair) is comprised of independent non-
executive directors.
Committees
There are three committees of the
board: Audit and Risk, Nomination,
and Remuneration. The ARC and the
Remuneration Committee (RemCo) are wholly
non-executive committees, and the members
are all independent non-executive directors.
The Chair of the board is a member of, and
chairs, the NomCo. The other members of the
NomCo comprise the SID), the CEO and two
other independent non-executive directors,
meaning the committee has a majority of
independent directors.
The membership and terms of reference
of these board committees are reviewed
annually. The terms of reference for each
committee is available on the Company’s
website https://www.integrafin.co.uk/
corporate-governance/.
Board succession
Following the decision by Christopher Munro
to retire from the board, the NomCo
appointed an independent search firm to
commence the selection process for a new
independent non executive member of the
IHP board and chair of the RemCo.
Jonathan Gunby announced his intention to
retire from the board and will not stand for
re-election. The board will continue to assess
the composition of the board and its ongoing
suitability throughout the year.
Directors’ induction
A tailored induction programme is prepared
for each new director, based on their
individual needs. The programme comprises
the following areas:
n
Information and materials: a comprehensive
library of materials is provided electronically,
including prior board and committee papers
and minutes, information on Company
values and culture, strategy materials,
regulatory information, and statutory and
governance documentation and policies.
n
Scheduled meetings: individual meetings
are arranged with key stakeholders and
employees to explore in more detail
significant aspects of the business and to
assist with relationship building between
the director and management.
During the financial year, Euan Marshall joined
the IHP board as Chief Financial Officer.
Directors’ development
and training
Each board member is responsible for
identifying training appropriate to their needs,
and the non-executive directors maintain
individual annual training logs. The Chair
and Company Secretary ensure continuing
training and development for all directors
based on individual requirements.
The board carries out periodic ‘deep dives’
into specific areas of the business in order to
broaden the board’s understanding of the
Group’s business and the opportunities and
challenges it faces. During the financial year,
training and deep dive sessions were
facilitated for the directors, covering the
following topics:
n
Information security, IT security and
cyber security
n
Update on the new Global Internal
Audit Standards
n
External ICARA training provided
by Deloitte as part of the Risk
Management Plan.
n
Defence manual planning refresh training
n
FCA Sustainability Disclosure
Requirements and Product Label regimes
In addition, open Q&A sessions between
the directors and management are held
periodically to facilitate engagement at
the layer below the board.
Board and Committee meetings and attendance
Board meetings
Audit and Risk Committee
Nomination Committee
Remuneration Committee
Eligible
Attended
Eligible
Attended
Eligible
Attended
Eligible
Attended
Caroline Banszky
5
5
6
6
—
—
—
—
Victoria Cochrane
1
5
5
6
5
6
6
6
6
Richard Cranfield
5
5
—
—
6
6
15
15
Michael Howard
5
5
—
—
—
—
—
—
Robert Lister
5
5
6
6
6
6
16
16
Euan Marshall
2
4
4
—
—
—
—
—
—
Christopher Munro
3
4
4
—
—
3
3
10
6
Alexander Scott
5
5
—
—
6
6
—
—
Jonathan Gunby
5
5
—
—
—
—
—
—
Rita Dhut
4
5
5
6
6
1
0
16
16
1
Victoria Cochrane became a member of the Remuneration Committee from 5 July 2024.
2
Euan Marshall became a member of the board from 3 January 2024.
3
Christopher Munro resigned from the board from 15 July 2024.
4
Rita Dhut became a member of the Nomination Committee from 14 August 2024.
Any absences were due to the short notice of the meeting; all non-executive directors were provided with the materials for the meeting and given an opportunity
to provide comments beforehand.
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58
IntegraFin
Annual Report 2024
Election and re-election of directors
The Company’s Articles of Association require all existing directors to retire from office at each AGM and be eligible for re-election.
Board effectiveness review
In line with best practice and the requirements of the Code, the board and its committees undertake an external evaluation every three years.
With the assistance of Independent Audit Ltd, the Company undertook an external evaluation in FY23 and the next external evaluation will
be conducted in 2026.
FY23 board evaluation – progress update
Independent Audit Ltd presented their report to the Chair and subsequently to the board in September 2023.
The areas identified for the board to focus on in FY23 and beyond, together with progress, are summarised below:
Area of assessment
Agreed action
Progress
Improved
communication to
and from subsidiary
boards, as well as
within the IHP board
IHP board members, subsidiary chairs and committee
chairs commit to prioritising improvements to the
subsidiary reporting up to the board. There will also be a
renewed focus on improving communications outside of
formal board meetings.
Whilst some progress has been made, it is acknowledged
that further improvement can be made and will be
incorporated into the 2025 board evaluation actions.
Improved timeliness
of board papers
Too many board papers are arriving after the cut off for
submission, thereby reducing directors’ ability to properly
review. Writers and reviewers therefore commit to more
regimented scheduling when drafting papers.
Whilst some progress has been made, it is acknowledged
that further improvement can be made and will be
incorporated into the 2025 board evaluation actions.
Improved conciseness
of papers to the board
Papers are to be shortened and will all include executive
summaries. The size of board packs will be reduced to
encourage the distillation of key information.
Whilst some progress has been made, it is acknowledged
that further improvement can be made and will be
incorporated into the 2025 board evaluation actions.
FY24 board evaluation
In 2024 the Company undertook an internal evaluation of the performance of the board and individual directors. The evaluation process is
outlined below:
Scope and planning
Obtaining feedback
Analysing and reporting
The Chair and Company Secretary met
to determine the proposed scope and
approach of the questionnaires to be
circulated for completion.
Tailored questionnaires were agreed
and loaded in Diligent board software for
completion by all directors and other
non-board attendees to gain diverse
feedback on the board’s effectiveness.
The results of the questionnaires were
analysed with key themes summarised
and a final report presented to the board
in September 2024 with actions agreed
to take forward.
The areas identified for the board to focus on in 2024 and beyond are summarised below:
n
Group and entity strategy sessions reviewing strategy scope.
n
Ownership of board cultural change programme led by the Chair with key focus on communication, inclusion and establishing clarity
of accountability.
n
Induction and transition to new IHP NED.
Chair evaluation
The SID led the performance evaluation of the Chair by meeting separately with each of the executives and NEDs, and the Head of Legal
& Company Secretary. The SID then met with the Chair to discuss the directors’ feedback and agree actions for 2025 and beyond.
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Annual Report 2024
Audit and Risk Committee report
Statement from the Chair
I am pleased to present the Audit and Risk Committee’s report
for the year ended 30 September 2024. The report provides
insight into our work undertaken this year and I would thank
all members for their contribution throughout the year.
The committee has been mindful of the micro
and macro risk environment within which the
Group operates and the risks and
opportunities that presents. During the year
the ARC has considered the impact of
changes to be introduced by the FRC
Corporate Governance Code 2024, the
development of climate-related reporting,
operational resilience and has received
updates on the UK authorised subsidiaries’
compliance with Consumer Duty
expectations and embedding.
The committee continues to scrutinise
management reporting on internal controls,
financial and non-financial reporting, the
independence and effectiveness of the
External and Internal Audit functions, and risk
management. During FY24 the committee
continued its oversight of the delivery of the
Group’s agreed objectives as the strategy
continued to be developed and delivered.
For the sustainability aspects of this strategy,
we have engaged the support of Brite Green,
sustainability consultants, to support our
journey and have carried out a materiality
assessment which will inform
the development of our strategy in this area.
In addition, the committee continued to review
the Company’s control environment, including
IT and general controls, with a focus on the
enhancement of the Group’s IT security.
I will be available to answer any questions at
the AGM. Further details will be set out in the
Notice of AGM.
Further information on the activities of the
committee is provided below.
In FY25, the committee will continue to
challenge management’s assessment of
and controls around the principal risks facing
the business, both internally and externally.
The committee will also continue to focus
on the delivery of the sustainability objectives
and the development of the Group’s RMF.
It will continuously assess whether the Group
remains within risk appetite and that it is
resilient to the ever changing fiscal political,
geopolitical, economic and social
environment within which we operate.
Caroline Banszky
Chair, Audit and Risk Committee
17 December 2024
Membership and attendance
The committee meets at least four times
each year and may meet at other times, as
requested by the Chair. The ARC met six
times during this financial year. Attendance
at the committee is outlined on page 58.
All committee members are independent
non-executive directors, consistent with the
Corporate Governance Code , with the
committee Chair being a qualified
accountant. The board also considers the
Chair to have recent and relevant financial
experience. The board is satisfied that the
committee as a whole has an effective
balance of skills and experience to perform
its responsibilities. Details of each member’s
skills, education and experience are outlined
in the Directors’ Biographies on pages 54 and
55.
The committee membership is kept under
review by the Chair of the committee, in
collaboration with the NomCo.
All committee members are provided with
initial and ongoing training to support them
in carrying out their duties effectively. During
the year, training was made available to the
committee on:
n
Information security and cyber/
technology security
n
Update on the new Global Internal
Audit Standards
n
External wind-down and ICARA training
provided by Deloitte
n
Defence manual planning refresh training
n
FCA Sustainability Disclosure
Requirements and Product Label regimes
Regular attendees at committee meetings
include the board’s Chair, IHP CEO, the IFAL
CEO, Group Chief Financial Officer, Platform
Group Head of Compliance, Group Chief
Risk Officer, Group Counsel, Group Head
of Internal Audit, Head of Legal/Company
Secretary and the Group’s external auditor.
Other non-executive directors and members
of management are invited to attend
meetings as required.
The committee Chair meets privately with the
Group Chief Financial Officer, Group Head of
Internal Audit, CRO, Head of Information
Security external Audit Partner and
Independent Quality Assurance Partner at EY to
discuss issued reports and relevant financial
and risk reporting and regulatory developments.
Members*
Caroline Banszky
(Chair)
22 August 2018
Victoria Cochrane
28 September 2018
Robert Lister
4 September 2019
Rita Dhut
16 March 2023
*
As at 30 September 2024.
Key highlights during the year
n
Review of the activities of the
subsidiary ARCs
n
Assessment and challenge
of the appropriateness of the
judgements and estimates
applied by management in the
preparation of the Annual Report
n
Oversight of the cybersecurity
programme and independent
security assurance testing
activities conducted on behalf
of the Group
n
Oversight of ISL key activities
for the regulated entities
Key priorities for the year ahead
n
oversight of the replacement of
financial and risk management
software
n
Continued subsidiary focus
including oversight at a Group
level for the embedding of
Consumer Duty
n
Oversight of the implementation
of the updated Corporate
Governance Code 2024 audit and
risk requirements
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Role of the committee
The primary role of the committee is to ensure the integrity of the financial and non-financial reporting and auditing processes and monitor
the effectiveness of the Group’s internal control, governance and risk management systems. This ensures there are continuing appropriate
levels of external and internal audit and risk assessment to cover all material risks (including fraud) and controls, including financial, operational
and compliance processes and procedures and non-financial reporting, including in particular, assurance over the Company’s compliance with
TCFD reporting.
The committee is also responsible for oversight of the Group’s relationship with the external auditor. This includes making recommendations to
the board in relation to the (re)appointment of the external auditor, approving its scope of work, fees and terms of engagement, as well as regularly
reviewing its independence, objectivity and effectiveness.
The detailed responsibilities of the committee are set out in its terms of reference, which can be found at www.integrafin.co.uk/corporate-governance.
Details of the work of the committee in discharging its responsibilities during the financial year are outlined further below.
Key committee activities through the year
Area of consideration
Committee review and conclusion
Financial reporting
During the financial year, the committee:
n
reviewed and challenged the financial reporting undertaken by the Group, with input and support from the Group’s
external auditor;
n
reviewed and considered the disclosures in the Annual Report and financial statements, recommended to the
board the published Annual Report and financial statements and Interim report and concluded that the reports
were fair, balanced and understandable;
n
considered the consistency of accounting policies, the financial reporting process and the disclosure of key accounting
and financial risks. Further information on the key financial and non-financial risks can be found on pages 45 to 47; and
n
reviewed the external auditor’s report.
Accounting judgements
and estimates
n
The committee assessed and challenged the appropriateness of the judgements and estimates applied by
management in the preparation of the Annual Report. The outcomes are provided later in this report.
Group-wide controls
n
The committee reviewed the progress made on strengthening the risk and control framework, enhancing the risk
and control culture and the approach and quality of our risk and control self assessments.
Whistleblowing
Champions assurance
n
A whistleblowing internal audit was undertaken resulting in recommendations including the establishment of
a new external whistleblowing hotline.
n
The Chair of ILUK Audit & Risk Committee is a key contact in the Whistleblowing Policy and fulfils the role of
“whistleblower’s champion” under the Senior Managers’ Regime whilst the Chair of the Audit and Risk Committee
has oversight of Whistleblowing for the Group.
Risk management
n
Using external IT security testing experts, penetration testing was completed across the Group’s sites and IT
environments including T4A and IAD.
TCFD reporting
n
The Company has published climate-related reporting in its Annual Report and financial statements based on the
TCFD’s recommendations. Details on this disclosure can be found on pages 33 to 37.
n
In preparing the Annual Report and financial statements, the committee was provided with information on the
methodology used by management for collecting climate-related data for publication in the Annual Report and
financial statements.
n
The committee reviewed and challenged the climate reporting particularly in respect of emissions and progress
against targets and as at the end of the financial year has requested that limited assurance be provided on
disclosures and data collection for the financial year.
Oversight
n
Oversight of the provision of key services by ISL to the regulated entities.
Committee
performance review
n
The committee undertook an internal effectiveness evaluation. We continued to improve the performance of
the committee.
Tax matters
n
The committee reviewed and approved the Group tax strategy and considered updates at meetings.
Accounting judgements and significant issues
Area of consideration
Committee duties discharged and conclusion or action taken
Goodwill impairment
assessment
The committee considered the goodwill impairment review of a Group subsidiary, including material management
assumptions included in the forecasts used for the value in use calculation.
The Committee concluded that no impairment was required and that management’s material estimates and
sensitivities relating to the assessment should be disclosed in the financial statements.
Provisions and
contingent liabilities
The committee concluded that the provisions recorded and contingent liabilities disclosed were an accurate
reflection of the Group’s position.
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Annual Report 2024
Audit and Risk Committee report
continued
Going concern and viability
The directors are required to make a
statement in the Annual Report on IHP’s
long-term viability. The committee provided
the board with advice on the form and
content of that statement. In advance of the
year end, the committee reviewed the Group’s
proposed stress and reverse stress test
scenarios and the assumptions underlying
them, used to support the Viability statement.
At the year end, management provided a
report to the committee setting out its view of
IHP’s long-term viability and the proposed
Viability statement, based on the Group’s
three-year business plan. This report
included, at both an individual Company and
consolidated Group level, forecast outcomes
of the business plan under the stress
scenarios agreed with the committee,
detailing capital and liquidity performance
against an assessment of risk appetite.
The report was produced on financial
data to 30 September 2024 and included
consideration of various scenarios as set out
on pages 49 and 50, both individually and
combined.
The committee discussed whether the choice
of a three-year period remained appropriate.
It concluded that this remained appropriate
due to the nature of the business. Taking
account of the assessment of the Group’s
stress testing results, the committee agreed
to recommend the Viability statement and
three-year viability period to the board
for approval.
The committee concluded that the Group has
sufficient financial resources and liquidity
and is well placed to manage business risks
in the current economic environment, having
considered the potential impacts of various
risks, and can continue operations for the
foreseeable future. The committee has
therefore concluded that the going concern
basis is appropriate.
Fair, balanced and
understandable assessment
The committee also undertakes a wider
review of the content of the Annual Report
and financial statements to advise the board
as to whether, taken as a whole, it is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Group’s performance, business
model and strategy. This supports the board
in providing the confirmations set out on
page 98 of the Statement of Directors’
Responsibilities.
In considering the wider content of the
Annual Report and financial statements,
the committee pays particular attention
to ensuring the narrative sections provide
context for, and are consistent with, the
financial statements, and that an appropriate
balance is struck between the articulation
of successes, opportunities, challenges
and risks.
The committee concluded that, taken as
a whole, the Interim and Annual Reports
were fair, balanced and understandable
and provided the information necessary
for shareholders, and other stakeholders,
to assess the Group’s position and
performance, business model and strategy.
B
See Viability Statement on page 49
Risk management
The committee oversees risk and control
matters at a Group level, with matters
which are specific to the regulated entities
overseen by the three regulated subsidiary
ARCs. Consistency is achieved through
the application, across all entities,
of the Group Risk Management Policy
and Framework.
Each subsidiary ARC has terms of
reference outlining its responsibilities and
the committee receives updates at each
meeting on key areas for escalation from
each committee Chair including
Consumer Duty, service issues, risk
events, regulatory requests and non-
standard assets.
During the financial year, the ARC:
n
oversaw the risk appetite statements
and RMF and reviewed its
effectiveness in relation to IHP, and
how Group companies have
implemented the framework;
n
received updates on the completion of
regulatory activities by authorised
Group companies including the
completion of the ICARA and ORSAs;
n
reviewed and recommended policies for
approval to the IHP board including the
Stress Testing Policy, Whistleblowing
Policy and the External Auditor Policy;
n
provided risk oversight support to ISL
and T4A;
n
reviewed the regular quarterly risk
reports presented by Group Risk
Management to ensure the business
continues to operate effectively with
the appropriate risk profile under the
hybrid working model;
n
reviewed and challenged the Risk
Reports presented by Group Risk
Management, and considered the
progress of management action taken
in order to address management points
raised on IHP specific risks;
n
received quarterly updates on
environmental matters;
n
considered the climate-related risks
and opportunities facing the Group and
how the regulated entities have
assessed the impact;
n
reviewed and assessed the Group’s
principal risks, uncertainties and
emerging risks and updated them
as appropriate;
n
assurance was sought from the Chairs
of the IFAL, ILUK and ILInt ARCs that
management points raised have been
addressed through appropriate
management actions;
n
assisted the board in maintaining an
appropriate culture within the Group,
which emphasises and demonstrates
the benefits of the risk-based
management of the Group; and
n
considered the points escalated
from the Group Company boards or
committees which affect IHP, or the
Group as a whole.
B
More details on the Group’s risk
management processes are outlined
on pages 43 and 44
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Annual Report 2024
Internal controls
The committee provides assurance to the board on the effectiveness of the Group’s risk management and internal control framework. A key
aspect of this is the review of all material controls, including reporting, financial, operational and compliance controls, that identify, assess,
manage and monitor top risks, which are an important aspect of ensuring the integrity of the Group’s financial statements as a whole and
facilitate achievement of strategic objectives.
The Group’s internal controls comprise elements that together provide an effective and efficient framework, enabling the Group to prepare for,
and if necessary, respond, to a variety of operational, financial and commercial risks.
During the financial year, the committee:
n
received reports from management on the effectiveness of
internal controls including over critical IT and information
security risks and financial crime risks encompassing the
detection and prevention of fraud, bribery and corruption,
money laundering and market abuse;
n
reviewed the Group definition of material contracts prior to
approval by the board;
n
enhanced the Group’s definition of material controls which
were recommended to the board for approval;
n
reviewed annual control self-attestations received from
senior management;
n
received quarterly reports from the Group risk
management function on the RMF which monitors
top risks against risk appetite and target risk scores;
n
received regular reports from the Group Internal Audit
function on the sufficiency and effectiveness of the
internal controls in those areas of the business included
in the Group Internal Audit Plan for the period. Actions
identified through internal audits are regularly monitored
and challenged throughout the process until the required
action has been achieved; and
n
reviewed the Group Head of Internal Audit’s annual
assessment of the Group’s risk management, governance
and internal control framework that included thematic
internal control observations and risk and control
culture enhancements.
The committee also received updates from management on progress to comply with the 2024 UK Corporate Code which will apply to the
Company from 1 October 2025. This includes setting out a revised framework of prudent and effective controls to provide a stronger basis
for reporting on and evidencing their effectiveness which will apply from 1 October 2026.
Internal audit
The Group Internal Audit department is focused on the delivery of internal audit services to the Group.
To do this, the Group Internal Audit department performs independent, objective assurance and advisory services designed to add value and
enhance risk management, governance and internal controls. The committee monitors the scope, activity and resource of the Group Internal
Audit department formally on a quarterly basis, and regularly meets with the Group Head of Internal Audit without executive management
present. In June 2024, we were pleased that the Group Internal Audit department was awarded ‘Outstanding team in Financial Services’ by
the Institute of Internal Auditors demonstrating the high quality of services provided.
During the financial year, the committee:
n
approved the Group Internal Audit Charter setting out the
Group Internal Audit department’s purpose, mandate,
authority, scope and responsibility;
n
approved the 12-month Group Internal Audit Plan and
resource, including proposed changes to the plan each
quarter to ensure alignment with the Group’s key risks.
In setting the plan, Group Internal Audit consider the
business strategy, regulatory priorities and its independent
view of current, emerging and systematic risks;
n
received and reviewed Group Internal Audit reports at
committee meetings including detailed review of any
recommendations made to management, management’s
action plans, and views over risk and control culture and
consumer outcomes;
n
monitored the status of any open management action
plans including receiving updates from the Chair of the
IFAL, ILUK and ILInt ARCs on the management actions in
response to the findings and recommendations of internal
audit reports pertaining to those entities;
n
reviewed all Group Internal Audit reporting escalated by
either the IFAL, ILUK, or ILInt ARCs, or activities within
other companies in the Group, which represent a
significant risk to the Group as a whole;
n
noted the conclusion of the annual Internal Audit
assessment that there were no significant deficiencies
that would need to be disclosed in the Annual Report;
n
approved proposed changes to internal audit methodology
and practices to ensure conformance with new Global
Internal Audit Standards and updated Internal Audit Code
of Practice.
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Annual Report 2024
Audit and Risk Committee report
continued
Internal audit
continued
There were several internal audit
engagements completed during FY24, in line
with the approved Group Internal Audit Plan.
The results of these internal audit
engagements were reported and discussed
and follow up actions were reviewed or
requested where necessary. The internal
audit engagements included, but were not
limited to, payments and fraud controls,
transfers out, whistleblowing process,
incident response and Transact Online
security, CASS, operational resilience and
financial models.
The Group Internal Audit function also
completed its annual assessment of the
Group’s risk management and key internal
controls relating to the Group’s major
business processes and top risks that
included an evaluation of the Group’s annual
fraud risk assessment.
Effectiveness and
independence of Group
Internal Audit function
During the financial year, the committee
performed its annual assessment on the
independence and effectiveness of the Group
Internal Audit function and concluded that
the function is working effectively and
independently in line with relevant
professional standards and that the team
was appropriately qualified and staffed. A
private session also took place between each
of the four ARCs (see structure on page 56)
and the Group Head of Internal Audit. The
subsidiary and IHP ARC sessions took place
in September 2024.
External auditor
Tenure
The last tender for the external auditor was
conducted in 2021, when EY was appointed
as the Group’s external auditor. EY’s
reappointment was ratified by shareholders
at the 2024 AGM. Mike Gaylor has been the
lead audit partner for three years.
Scope of the external audit plan
and fee proposal
During the financial year, the committee:
n
reviewed EY’s overall work plan;
n
advised EY, through regular
communication, of any specific
matters which the committee
was considering from previous
audits and current operations;
n
approved EY’s remuneration and
terms of engagement, taking into
consideration feedback from the
three operating subsidiary ARCs;
n
assessed EY’s independence and
objectivity;
n
reviewed and approved external
auditor fees;
n
approved revisions to the External
Auditor Policy in relation to the
provision of non-audit services
and hiring of ex-employees;
n
considered quarterly reporting on
non-audit services and audit-
related non-audit services
provided by EY; and
n
assessed the effectiveness of the
external audit.
External auditor independence and
non-audit services
In order to safeguard the independence and
objectivity of the external auditor, the ARC is
responsible for the development,
implementation and monitoring of the
Group’s policy on the provision of non-audit
services and oversight of the hiring of
personnel from the external auditor, should
this occur. The committee must pre-approve
any non-audit services in line with the
requirements of the FRC’s Revised Ethical
Standard 2019. The committee received a
report at each meeting detailing fees paid
and proposed for an non-audit work by the
external auditors. During the year ended 30
September 2024, EY provided non-audit
services, however, all services provided fall
under categories explicitly permitted under
the Revised Ethical Standard 2019. The fees
are disclosed in note 8 to the financial
statements and stated as other assurance
services.
Effectiveness of external
audit process
The ARC is responsible for assessing the
qualifications, expertise and resources of the
external auditor and for reviewing the
effectiveness of the external audit process.
As part of this process, the views from
executive management, including leadership
at ISL, IAD and T4A, ARC members and the
Chairs of the three subsidiary ARCs are
sought on the following:
n
the efficiency of the year-end process;
n
the quality of the audit partner and team;
n
the planning and execution of the audit;
n
quality of audit reporting and delivery;
n
extent and nature of challenge
demonstrated by EY in its work and
interaction with management; and
n
EY’s independence and objectivity.
The committee also reviews the FRC’s annual
Audit Quality Inspection and Supervision
Report of EY and received a report from EY
on its own internal quality control procedures.
The Chair met with Andy Bates UK Financial
Services Head of Audit to discuss the external
audit process. It was confirmed that all internal
reviews had been completed, paperwork
provided and audit queries answered and there
was nothing to draw to the Chair’s attention.
The responses indicated that, overall, EY was
performing in line with expectations and has
demonstrated challenge and professional
scepticism in performing its role. The ARC
concluded that the external audit process was
effective and the committee remains satisfied
that EY continues to display the necessary
attributes of independence and objectivity.
Accordingly, the committee has recommended
to the board a proposal for the reappointment
of EY as external auditor at the next AGM.
Committee self-evaluation
The following provides an update
on progress against areas agreed
as priority areas of focus for the
committee in 2023
Area of focus
Progress
Schedule a risk
identification
deep dive
session
In depth discussions
relating to risk
management and
identification including
agreeing the quarterly
risk report together
with horizon scanning
The induction
and transition of
responsibilities
to the incoming
Group CFO
Successfully completed
Monitor
developments
in relation to the
BEIS corporate
governance
and audit
During the year the
committee has
considered the changes
introduced by the
Corporate Governance
Code 2024 and the
development of climate
reform and ESG
related reporting
The following areas were agreed as priority
areas of focus for the committee in 2024
n
Continued focus on effective agenda,
paper quality and meeting management
n
Review of risk appetite framework and
ongoing reviews
n
Disaster Recovery, including following
a cyber incident with training to
be delivered
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Annual Report 2024
Nomination Committee report
Statement from the Chair
I am pleased to present the Nomination Committee’s report
for 2024. Following the retirement of Christopher Munro in
July 2024, we welcomed Rita Dhut to the committee whilst
we undertook the search for our new non-executive director.
I would like to extend my thanks to all members for their
work throughout the year.
The committee meets at least once each
year and may meet
at other times as
requested by the Chair. The committee met
six times during the financial year, due to the
committee’s wider remit of oversight of
subsidiary board succession planning and
increased senior management succession
planning. The committee’s attendance is
outlined on page 58.
During the year the committee supported the
appointment of a new chair for the IFAL board,
a new independent non-executive director of
the ILUK ARC and commenced the search for
a new independent non-executive director of
the IHP board and RemCo chair. The
committee also considered the suitability
and appropriateness of various executive and
senior management function appointments
within the Group.
Richard Cranfield
Chair, Nomination Committee
17 December 2024
Role and composition
of the committee
The primary purpose of the committee is
to develop, maintain and to lead the process
for board and committee appointments
and reappointments to the boards
and committees, including making
recommendations to the relevant board.
The committee will also ensure that plans
are in place for orderly succession to both
the board and senior management positions
for the Group and oversee the development
of a diverse pipeline.
The committee regularly reviews the size
and composition of the boards to ensure that
the necessary skills, knowledge and
experience are available and to ensure that
boards are balanced and that high standards
of corporate governance are met on an
ongoing basis.
The role and responsibilities of the NomCo
are set out in its terms of reference which
can be found at www.integrafin.co.uk/
corporate-governance.
The majority of members of the NomCo
are independent non-executive directors.
The Chair of the board chairs the committee,
however, he is not permitted to chair when
the committee is dealing with nominating
a successor to the Chair.
The CEO is a member of the committee.
We believe that the CEO contributes valuable
insight into the composition of the
management team, interaction of the board
with management and cultural fit of
candidates to the board and senior
management team and that his membership
of the committee does not affect the
independent decision making by the
committee. The CEO recuses himself
from any discussion or recommendation
about himself.
Members*
Richard Cranfield
(Chair)
1 August 2019
Victoria Cochrane
28 September 2018
Rita Dhut
14 August 2024
Robert Lister
16 March 2023
Alexander Scott
2 March 2020
*
As at 30 September 2024.
Key highlights during the year
n
Supporting the appointment of the
chair to the IFAL board, a new
independent non-executive director
to the ILUK Audit and Risk
Committee
n
undertaking the search for a new
independent non-executive director
of the IHP board and chair of the
RemCo
Key priorities for the year ahead
n
Develop the succession plan for
executive and senior
management roles
n
Recommending the appointment
of an additional independent
non-executive IFAL director
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Nomination Committee report
continued
Directors’ induction
The programme comprises the following areas:
Information and materials
Materials are provided electronically
including prior board and committee
papers and minutes, regulatory
information and statutory and
governance documentation.
Scheduled meetings
Individual meetings are arranged with
executives and senior management to
understand key areas of the business
and assist with relationship building.
eLearning
A full library of eLearning modules is
made available to all new directors
covering a range of regulatory and
operational matters.
Directors’ development
and training
The Group provides initial and ongoing
training for committee members, to support
them in carrying out their duties effectively.
This is delivered through in-house technical
employees, through the attendance at formal
conferences, as required, and an in-house
training programme.
Each board member is responsible for
identifying any specific ongoing training
needs and non-executives maintain
individual training logs.
The Company arranges deep dive training
days throughout the year for non-executives,
on topics relating to commercial, regulatory
or legal matters directly affecting the Group.
Topics covered in the year include:
n
strategy and business environment;
n
Consumer Duty;
n
FCA priorities;
n
cyber risk and IT security;
n
data privacy and information security;
n
outsourcing; and
n
culture and workforce engagement.
Non-executive directors have open agenda
meetings with managers below the board to
facilitate engagement beyond the board.
Election and re-election
of directors
The Company’s Articles of
Association require all directors to
retire from office at each AGM and
be eligible for re-election.
With the exception of Jonathan Gunby,
all directors who served on the board on
30 September 2024 will be standing for
re-election at the AGM.
Jonathan Gunby resigned from the board on
17 July 2024 and is not standing for
re-election.
Independence and
time commitment
All the non-executive director are considered
to be independent and the Chair was
considered to be independent upon
appointment to the role. There are a number
of ways in which the independence of the
non-executive directors is safeguarded and
in which time commitments are considered:
n
the SID meets at least annually with each
non-executive director to discuss and seek
feedback on the chair’s performance;
n
the Chair conducts performance reviews
for the CEO, non-executive directors and
subsidiary board chairs;
n
non-executive director tenure is reviewed
annually by the committee as part of
board succession planning;
n
any external commitments must be
disclosed to the board and approval of the
Chair must be given to ensure time
commitment to the Company is not
impaired; and
n
when making new appointments, the
board considers other demands on
directors’ time.
The committee has considered the
commitments of all non-executive directors
and recommended to the board that each
non-executive director remains able to
commit sufficient time to dedicate to their
role as a director.
Conflicts of interest
The Company’s Articles of Association
permit the board to consider and authorise
situations where a director has an actual,
or a potential, conflict of interest in relation
to the Group. The Company maintains
a conflicts of interest register.
In addition, at the start of each board
meeting, the directors are asked to declare
any conflicts that they may have with regard
to the business of the meeting. Directors who
declare a conflict may be authorised by the
rest of the board to participate in decision
making in accordance with section 175 of
the Companies Act 2006.
When considering and, if appropriate,
authorising any conflict or potential conflict,
the board may impose limitations,
qualifications or restrictions it requires as
recommended by the committee.
Succession planning
IHP board succession planning
Christopher Munro and Jonathan Gunby both
announced their retirement from the board in
FY24. Euan Marshall was appointed to the
board with effect from 3 January 2024.
In light of these changes the committee
reviewed the size, composition, diversity and
skill set of the board and its committees and
in the summer months, a search was
undertaken for a new non-executive director
to join the IHP board as non-executive
member and chair of the RemCo following
the retirement of Christopher Munro.
The committee also considered the skills
and tenure of the non-executive directors.
We continue to keep in mind the profile
of our board members and formulate our
succession planning accordingly.
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IntegraFin
Annual Report 2024
Subsidiary board and committee succession planning
During the financial year, the committee assisted the regulated operating subsidiaries. We supported the process of recruiting a new a non-
executive member and Chair of the IFAL board. We also supported the process of recruiting a non-executive member of ILUK Audit and Risk
Committee.
Senior management succession planning
Senior management succession planning continues to be a key focus of shareholders and the committee. With the appointment of the CFO,
the committee is satisfied that the management succession plan is strengthened but maintains oversight of developments to ensure a resilient
pipeline which will support the future success of the business.
The board secured the services of Odgers Berndtson, Korn Ferry and Egon Zehnder in the executive and non-executive recruitment during the
year. No directors have connections with any of the firms engaged.
Diversity, equity and inclusion
Inclusivity throughout the business is important to us and we continue to focus on this by developing our diverse talent pipeline. The board
supports the Hampton-Alexander Review on gender diversity and the Parker Review on ethnic diversity. I am pleased to say that we have
33% representation of women on our board (FY23: 33%) and 50% female representation in roles which we define internally as our senior
management equivalent (FY23: 57%). In addition, one member on our board is ethnically diverse (FY23: one) and our SID is female.
We recognise that developing diverse talent at the executive, senior management and direct report levels is important and this will be considered
in the Group’s ongoing leadership succession plans.
Board Diversity Policy
The board has a Diversity Policy which is reviewed and assessed annually.
New appointments to any Group or subsidiary board are made on merit, taking into account the different skills, industry experience,
independence, knowledge and background required to achieve a balanced and effective board. When identifying suitable candidates for
appointment to any Group board, we consider candidates on merit against objective criteria and with due regard for the benefits of diversity
on the board.
Board and executive management diversity policies
The Group has an Equal Opportunities Policy which applies to all employees. We are proud to have a culture of developing our workforce
to provide opportunities for promotion within the organisation, alongside recruiting external talent to enhance diversity of thought. Internal
opportunities not only include traditional vertical promotions, but in many cases opportunities to move to different departments within the
Group and learn new skills or undertake professional development. This approach ensures that we develop a pool of talented individuals who
may have the potential for succession into senior roles. We support employees by providing relevant training, assistance and resources to help
them succeed in their new roles. In the last year, 42 employees accepted internal job opportunities (FY23: 72). In contrast, 75 job opportunities
were filled by employees hired externally (FY23: 112).
Reporting on gender or sex as at 30 September 2024
Number of
board members
Percentage
of the board
Number of
senior positions
on the board
Number
of executive
management
Percentage
of executive
management
Men
6
67%
3
5
50%
Women
3
33%
1
5
50%
Prefer not to say
—
—
—
—
—
As at 30 September, the board is comprised of 33% women. Appointments to Group or subsidiary boards are made on merit with due regard for
the benefits of diversity on the board.
Anonymous surveys are undertaken for executive directors and below asking for the provision of information based on a series of questions
including ethnicity and gender. Non-executive directors have approved disclosures relating to information covering the board in the annual
reporting process.
Reporting on ethnicity as at 30 September 2024
Number of
board members
Percentage
of the board
Number of
senior positions
on the board
Number
of executive
management
Percentage
of executive
management
White British or other white (including minority-white groups)
7
78%
4
9
90%
Mixed/Multiple Ethnic Groups
—
—
—
—
—
Asian/Asian British
1
11%
—
1
10%
Black/African/Caribbean/Black British
—
—
—
—
—
Other ethnic group, including Arab
—
—
—
—
—
Not specified/prefer not to say
1
11%
—
_
_
Jonathan Gunby stepped down from the board on 30 September 2024 but is included in these reports as he was a director at the end of the
financial year.
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IntegraFin
Annual Report 2024
Statement from the Chair
Remuneration overview
As interim Chair of the Remuneration Committee at the end
of the financial year, I am pleased to present the Directors’
Remuneration Report for the year ended 30 September 2024.
The report is set out in five sections:
n
this letter which summarises our remuneration ethos, and the key decisions made by the
committee during the year;
n
a summary of our current Remuneration Policy “at a glance” along with the outcomes for our
executive directors which can be found on pages 71 to 73;
n
a summary of our proposed new Directors’ Remuneration Policy and our approach to
directors’ remuneration for FY25 to be found on pages 73 and 74;
n
the proposed new Policy on pages 75 to 81; and
n
our annual Directors’ Remuneration Report, which can be found on pages 81 to 94, and sets
out how the committee has delivered its responsibilities throughout the year.
Our current Directors’ Remuneration Policy was approved by over 92% of shareholders at the
2022 AGM.
Remuneration Committee
composition
With Christopher Munro stepping down from
the board and the committee, I was
appointed interim Chair during the year and
Victoria Cochrane stepped in as an additional
member pending the selection and
recruitment of a new Chair of the committee.
The Nomination Committee has undertaken
a search and will be recommending the
appointment of a new non-executive director
and Chair of the committee in due course.
New Remuneration Policy
The committee’s principal activity during
FY24 was the development of a new Directors’
Remuneration Policy which is set out in this
report and will be tabled for shareholder
approval at the forthcoming AGM in 2025.
This is the first significant Remuneration
Policy review since IPO in 2018 and, as such,
the committee has been keen to ensure that
it resulted in an effective remuneration
package. We spent some time considering an
incentive plan design which would work for
IntegraFin. A key consideration was that the
business model of IntegraFin suits simplicity
of approach. A ‘high risk, high incentive’
approach would be inconsistent with our
business model and our culture. We were
also conscious that our new incentive model
would be cascaded to the senior team, and
therefore incorporating alignment and line of
sight were important to our aims.
As well as the overall structure we also
considered the quantum and the levels of
incentives and base salary for our executive
directors. Our proposals include step change
increases to both maximum incentives and the
CEO’s base salary. However, the proposed
increases to incentives and the overall reward
result in a structure which remains modest
against FTSE and sector peers and delivers an
overall package positioned at the lower end
of market practice.
We undertook significant shareholder
consultation in the development of the new
Policy, and we evolved our approach taking
into account shareholder feedback. Our
proposed new Combined Incentive Plan (CIP)
will be based primarily on annual performance
and will have a maximum out-turn of 200%,
which for FY25 will be a maximum of 200%
for the CEO and 180% for other executive
directors. Key features include the following:
n
Introducing hard financial and non-
financial targets – Recognising previous
shareholder feedback on the discretionary
nature of our incentive plan, we are
introducing defined financial and
non-financial targets which will apply to a
significant proportion of the plan and we
are retaining but down-weighting the
discretionary element.
n
Long-term features – Our new approach
includes a significant quantity deferred
into shares. We will have a long-term
performance underpin for a portion of
the shares and, for executive directors,
a further holding period. The proposed
incentive model will therefore be
significantly tilted to the longer term.
Directors’ remuneration report
Annual statement by the Chair of the Remuneration Committee (unaudited)
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IntegraFin
Annual Report 2024
We undertook two rounds of shareholder
consultation during the development of the
Policy and offered meetings to just under 50%
of our shareholder base. We had meetings with
a significant majority of these shareholders.
During the shareholder consultation process,
we heard a wide range of views. Shareholders
were generally supportive of the uplift to
incentives and to the CEO’s salary. On
incentive design and performance measures,
we heard a mix of views.
Some shareholders would have preferred us
to propose a more traditional LTIP model, but
generally shareholders were receptive to the
rationale for our proposed approach and
appreciative of the features above.
In particular shareholders liked the increased
transparency via quantifiable targets,
long-term underpins and holding periods
for alignment to shareholder interests.
These were seen as a significant step
forward compared to the current approach
to variable remuneration.
Overall we believe that our approach delivers
a design which reflects the Company’s
approach to responsible remuneration,
allows the attraction and retention of talent
and supports the long-term success of
the Group.
The proposed new policy is set out on pages
75 to 81, and a summary of the policy can be
found on pages 73 and 74.
CEO salary adjustment
As part of the policy review we also
considered the salary level for the CEO.
Alexander Scott has been in role for four
years, and our review of market data
suggested that his current salary level was
significantly below the level appropriate for
the CEO position. When deliberating a salary
adjustment we took into account a number
of different considerations, including internal
relativities and the impact this was having on
hiring senior talent, and positioning against
the market.
Following consultation with shareholders,
we decided to increase his salary by 13.1%
to £545,000. This increase comprised:
n
an inflationary increase of 4.5% which
was backdated to apply from 1 June 2024
(aligned to our workforce increase); and
n
a further step change adjustment of 8.3%
which would apply from 1 October 2024.
While we recognised that an increase to both
incentives and salary had a multiplier impact
on overall remuneration, our view is that the
resultant total compensation level continues
to be relatively modest against practice in
listed companies. Shareholders we consulted
with were generally supportive of
our approach.
CFO appointment
The Group undertook several planned
changes of the board during the year.
We welcomed Euan Marshall as CFO to
the Group in January.
At the time of Euan’s appointment, the
committee had begun the process of
reviewing the variable framework for
executive directors. In order to ensure we
had flexibility in how we developed the policy,
we structured Euan’s package as a two part
offer with a base salary of £375,000 and a
pensionable and bonusable cash supplement
of up to £50,000, but with a contractual
commitment that salary would become
£425,000 if the current incentive policy
maximum were to continue.
Euan was awarded a salary increase of
4.5% effective 1 June so that his salary as at
30 September was £391,875 plus the cash
supplement, which remained unchanged.
This increase was the same as the 4.5%
awarded to other executives and the
wider workforce.
When the design of the new Policy was
finalised, to ensure alignment to deliver the
expected total compensation out-turns, the
committee revised his base salary to
£400,611 with effect from 1 November 2024.
The final salary was therefore, as anticipated,
set at a level lower than the salary of
£425,000 which was contractually agreed if
the current policy maximum had continued.
As part of his recruitment it was necessary
for the committee to award a buyout in
relation to awards forfeited from his previous
employment. More details are set out on
page 90 of the Remuneration Report.
Other board changes
Jonathan Gunby retired from the board on
30 September. He remains an employee of
the Group and a director and Chief Executive
Officer of IFAL. He received a variable award
in respect of his service as an executive
director of the Company and the Group
in FY24.
Chair fees
In late 2023, the committee undertook
a review of the fee for the Chair of the board
in light of the time commitment and work
required by the Chair in the delivery of his
duties. The committee considered carefully
the market context and appropriate peers in
the financial services sector and determined
that a stepped approach was most
appropriate. In January 2024 the committee
approved an interim fee adjustment from
£140,000 to £180,000 backdated to
1 October 2023 and at the end of the
financial year the committee approved a
further step increase to £220,000 with effect
from 1 October 2024.
Remuneration outcomes for
year ended 30 September 2024
For the financial year 2024, the Company
achieved financial results ahead of plan with
PBT of £68.9 million (10% increase on prior
year). Financial performance is set out in
more detail on pages 38 to 42 of this report.
The FUD at was at record level and ahead of
plan at period end. The platform recorded
strong gross flows in a weaker market with
net inflows only marginally down on target.
Service standards have been maintained and
the platform has performed well in adviser
and client surveys, winning the “Best
Platform for Advisers” at the Professional
Adviser Awards and “Best Service for
Paraplanners (new business)” at the Annual
Paraplanner Awards. Progress has been
made with the development of CURO PP
however more development is being
undertaken to widen the user market.
For the year end 30 September 2024, the
performance framework has utilised the
more discretionary approach to variable
awards under our current Remuneration
Policy, based on our four anchors of financial
performance; stakeholder outcomes; risk,
regulation and ESG; and strategy delivery.
As in previous years, a portion of the bonus
is paid in cash and a portion is deferred
into shares.
Directors’ bonuses were awarded within the
parameters of the existing Policy. Alexander
was awarded a cash bonus of 26% and a
bonus award deferred into shares of 29%.
Jonathan was awarded a cash bonus of 25%
and a bonus award deferred into shares of
27%. Euan Marshall was awarded a cash
bonus of 31% and a target bonus award
deferred into shares of 33%. Michael Howard
did not receive a bonus. The committee
considered that these bonus awards were
a fair reflection of the Company’s
overall performance.
In making these awards, by assessment
against the anchors, the Remuneration
Committee considered the performance of
the Company over the financial year against
its strategic objectives; the business plans
approved by the board; market consensus;
regulatory requirements; and the current
state of financial markets. Variable awards
have been assessed against the extent to
which deliverables have been achieved.
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Annual Report 2024
Statement from the Chair
continued
Executive director salaries
The Company and the committee reviewed
workforce salaries in June. The average
award to all employees who were eligible for
an increase was 4.5%. Salary increases for
executive directors were also considered,
carefully taking into account the competitive
positioning of their packages as against the
market, as well as the context of the new
Remuneration Policy. As a result, awards
were made of 4.5% for Alexander, Jonathan
and Euan, effective from 1 June, which was
equal to the average for all employees.
Pensions
Whilst the pension policy for executive
directors is equivalent to that of the
workforce, Alexander, Jonathan and Euan
have elected not to take advantage of the
salary sacrifice arrangement and to limit
their contributions to the 9% provided under
the contractual enrolment scheme. As a
result, at 9%, the actual employer pension
contributions made in respect of executive
directors are below the 12.3% of basic salary
contribution available to all employees.
From FY24, the committee has ended the
opportunity for executive directors to
sacrifice any element of their bonus into their
pension. Our current pension arrangements
therefore align with the Corporate
Governance Code as regards the alignment
of executive pensions with the
wider workforce.
Alignment with shareholders
We are mindful of our stakeholders and are
keen to ensure a demonstrable link between
reward and value creation. It remains one of
our key principles to deliver an attractive
proposition to our customers, shareholders
and employees and hence to implement
a reward framework that shares success
responsibly and appropriately between these
stakeholders. We remain committed to an
open and ongoing dialogue with our
shareholders regarding executive
remuneration and we welcome feedback.
I would like to thank all shareholders who
took part in the shareholder consultation
process as we developed our new
remuneration approach.
To support the implementation of our new
Policy we will also be proposing a resolution
for a new share plan which will allow share
awards to be made to executive directors and
other senior executives under the CIP.
I hope that you find this year’s report
informative and you will support our
remuneration resolutions at the
forthcoming AGM.
Signed on behalf of the IHP
Remuneration Committee,
Rita Dhut
Interim Chair, Remuneration Committee
17 December 2024
Directors’ remuneration report
continued
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IntegraFin
Annual Report 2024
This report has been prepared in accordance with the provisions of the Companies Act 2006 and the Large and Medium-Sized Companies
and Groups Regulations 2013, as amended. It also meets the requirements of the UK Listing Authority’s Listing Rules and the Disclosure and
Transparency Rules.
The Report describes how the board has complied with the provisions set out in the UK Corporate Governance Code 2018 relating to
remuneration matters.
UK Corporate Governance Code – Provision 40
When developing the DRP and considering its implementation, the committee was mindful of the UK Corporate Governance Code and considers
that the executive remuneration framework appropriately addresses the following considerations:
Area of focus
Our approach
Clarity
n
Our remuneration framework for executives supports the strategic objectives of the Company, and is
communicated to stakeholders, including shareholders and employees in a clear and transparent way.
Simplicity
n
We operate a remuneration framework for our executives and our wider workforce that is simple in nature and well
understood by participants.
n
Our new CIP is a simple model that aligns out-turns for our most senior managers with those experienced by
our shareholders.
Risk
n
We believe our approach to performance measurement supports appropriate consideration of risk management
and a long-term view of the business based on sustainable growth. Total remuneration is structured in a way which
does not encourage short-term risk taking in order to deliver financial outcomes for executives.
Predictability
n
The new Policy sets out the possible future values of remuneration which executive directors could receive
– see pages 71 and 72 for more details.
Proportionality
n
Our executive director remuneration is measured and proportionate and remains modest in comparison with peer
group FTSE 250 firms.
Alignment to culture
n
Our remuneration structure is designed to be responsible, inclusive, aligned with stakeholder interests, and to
ensure we reward on merit. We consider that our approach reflects our culture.
1. Directors’ remuneration ‘at a glance’
Element
Operation
Out-turns FY24 and implementation in FY25
Base salary
n
Increases will take into account a number of factors
including the scale of the role and the individual’s
experience and wider workforce increases.
The salary increase awarded during FY24 and effective
1 June was 4.5% for Alexander, Jonathan and Euan which
was equal to the workforce increase.
Effective 1 October 2024, and following consultation with
shareholders, Alexander has been awarded an additional
8.3% salary adjustment, reflecting the outcome of the
committee’s review of his salary after four years in the role
and as part of the wider Policy review (see page 69).
Euan’s salary from 1 November 2024 was increased to
£400,611. This was in the context of the introduction of the
new incentive plan (contractually his salary would have
been £425,000 if the incentive policy had stayed the same)
(see page 90).
Salary with effect from 1 October 2024:
n
Alexander Scott, CEO: £545,000;
and from 1 November 2024:
n
Euan Marshall, Executive Director: £400,611.
Benefits
n
Executive directors are eligible to receive the same
benefits on the same terms as the wider workforce.
n
Benefits for Alexander, Jonathan and Euan comprise
private healthcare, death in service and PMI.
n
Alexander, Jonathan, Euan and Michael Howard
benefited from the discounted platform charges.
Pension
n
The pension policy is equivalent to that of the
wider workforce.
n
The executive directors’ current pension arrangements
are the same or lower than those available to the
workforce. Unlike the wider workforce executive
directors are not able to sacrifice any element of
variable remuneration into their pension.
n
Alexander received a £35,665 pension contribution
(7.29%).
n
Jonathan received a £35,665 pension contribution
(7.29%).
n
Euan received a £29,194 pension contribution (9%).
n
The minimum employer contribution available to the
wider workforce during FY24 was 9%.
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IntegraFin
Annual Report 2024
Element
Operation
Out-turns FY24 and implementation in FY25
FY24 variable reward
comprising:
i)
an annual cash
bonus element; and
ii)
a deferred bonus
award of shares
n
Total maximum opportunity is 100% of salary.
Outcomes are made by reference to the four anchors
– financial performance; stakeholder outcomes; risk,
regulation and ESG; and strategy delivery.
n
The committee uses judgement and discretion when
determining outcomes under the annual bonus and
deferred bonus awards.
n
The deferred bonus awards will usually vest on the
third anniversary of the grant date.
n
For 2024 Alexander was awarded a cash bonus of 26%
and a bonus award deferred into shares of 29%.
Jonathan was awarded a cash bonus of 25% and a
bonus award deferred into shares of 27%. Euan was
awarded a cash bonus of 31% and a bonus award
deferred into shares of 33%.
FY25 CIP comprising:
i)
an annual cash
bonus element;
ii)
a bonus deferred
into shares for
three years
iii)
a bonus deferred
into shares with
a three-year
underpin and
holding period
n
Total maximum opportunity is 200% of salary.
n
The CIP is based primarily on annual performance with
deferral and holding periods applying.
n
Following annual assessment of performance, deferral
will operate on a tiered basis:
1. For the first 30% of the overall maximum:
—
70% cash
—
30% deferred into shares for three years
2. For the next 70% of the overall maximum:
—
10% cash
—
10% deferred into shares for three years
—
80% deferred into shares for three years with a
performance underpin and holding period.
n
For shares subject to a holding period, the holding
period shall normally end following the fifth year after
the start of the performance period.
n
For deferred shares subject to a performance underpin,
the underpin will be assessed after the three-year
vesting period.
For FY25, maximums are:
n
200% of salary for the CEO.
n
180% of salary for the CFO.
For FY25, performance measures are:
n
underlying PBT (50%)
n
risk (10%)
n
adviser measure (5%)
n
staff engagement score (5%)
n
governance, regulatory and sustainability (10%)
n
strategic/personal (20%)
For awards made in FY25, the performance underpin will
include a quantitative profit-based underpin, progress
against sustainability targets and regulatory performance.
See the summary on page 71 for more details.
All-employee share
incentive plan
n
The plan is operated in line with HMRC guidance.
Executive directors are eligible to participate in the
all-employee Share Incentive Plan (SIP) on the same terms
as all employees.
Shareholding
guidelines
n
Executives are expected to build up and hold 100% of salary in shares over four years, for in-employment
shareholding guidelines.
n
Post-employment, these guidelines will apply in full (i.e. 100% of salary) for the first year post-departure and taper
down to half (i.e. 50% of salary) for the second year post-departure. This policy does not apply to shares purchased
with an Executive’s own funds and applies only to awards made after the approval of the 2021 Remuneration Policy.
Non-executive
director fees
n
Fees are paid monthly
During the year a review of the Chair fee and non-executive
director fees was undertaken; see page 94 for more details.
Fees with effect from 1 October 2024:
n
board Chair: £220,000
n
base fee for non-executive director: £66,000
n
additional fee for chairing ARC: £42,000
n
additional fee for chairing Remuneration Committee: £27,000
n
additional fee for ARC member: £15,000
n
additional fee for Nomination Committee member:
£5,000
n
additional fee for Remuneration Committee member:
£7,500
n
additional fee for role of SID: £10,500
n
additional fee for Designated non-executive director: £6,000
Directors’ remuneration report
continued
1. Directors’ remuneration ‘at a glance’
continued
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IntegraFin
Annual Report 2024
FY24 remuneration outcomes for our executive directors
Alexander Scott, CEO
Total remuneration
£804,567
Jonathan Gunby, Executive Director
£787,572
Euan Marshall, CFO
£907,548
Fixed
Cash bonus
Deferred bonus
Other
2. Remuneration Policy summary and implementation for FY25
During 2024, the Remuneration Committee conducted a holistic review of IntegraFin’s Remuneration Policy. Following the review, the key
change to the Policy is the introduction of a new CIP. We undertook significant shareholder consultation in the development of the new Policy
and believe that it delivers a design which reflects the Company’s approach to responsible remuneration, allows the attraction and retention of
talent and is aligned with ensuring the long-term success of the Group. A summary of the proposed policy is set out below and the full policy can
be found on pages 75 to 81.
Shareholder consultation
The process involved two rounds of shareholder consultation, and meetings were offered to just under 50% of our shareholder base.
Shareholders were generally supportive of the uplift to incentives proposed. On incentive design, while some shareholders would have preferred
us to propose a more traditional LTIP model, shareholders were receptive to the rationale for the proposed approach. Following the first round of
shareholder consultation we responded to feedback, particularly in relation to performance measures and to further simplify the overall approach.
Principles for the policy review
It remains one of our key principles to deliver an attractive proposition to our customers, shareholders and employees and hence to implement
a reward framework that shares profit and success responsibly and appropriately between these stakeholders. The following were taken into
account when reviewing the Remuneration Policy:
n
Current very modest incentive levels
: Total maximum incentive opportunities at IntegraFin were set at 100% of salary on IPO in 2018 and
have not increased since then. This was recognised as a very modest level when compared to other executive directors of companies of
similar size and complexity.
n
Attracting talent
: Over the last 18 months we have made a number of senior hires below board, building our pipeline of talent to take the
Group forward. We therefore had a real opportunity to test the market for attraction of talent, and our conclusion was that the current
approach to incentives, which cascades across the business, was not at a level which supported the attraction of talent.
n
Culture and simplicity of approach
: A key consideration was that the business model of IntegraFin suits simplicity of approach. A high risk,
high incentive approach would be inconsistent with our business model and culture. Our approach will be cascaded to the senior team, and
therefore simplicity and line of sight were important considerations.
n
Long-term features:
The review recognised that alignment to long-term performance would be important for our shareholders. Our new
approach includes a significant proportion deferred into shares, a long-term performance underpin, and, for executive directors, a further
holding period. The proposed incentive model will therefore be significantly tilted to the longer term.
n
Introducing hard financial and non-financial targets
: Recognising previous shareholder feedback on the discretionary nature of the current
incentive plan, the new approach introduces defined financial and non-financial targets which will apply to a significant proportion of the plan
and retain but down-weight the discretionary element. Overall, our approach to performance measures and targets is focused on supporting
our key principles to create, maintain and improve value to our four groups of stakeholders – customers, shareholders, suppliers and employees.
Overview of the new Policy and implementation
As a result of the review process, the committee is proposing to introduce a new CIP, with an increased overall incentive opportunity and
incorporating objective financial measures. The CIP, based primarily on annual performance, will include significant deferral into shares, holding
periods, a longer-term performance underpin and strengthened malus and clawback.
£142,028
£525,591
£129,100
£7,848
£525,591
£120,800
£132,892
£8,289
£353,479
£100,000
£107,044
£347,025
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Corporate governance
Financial statements
Other information
73
IntegraFin
Annual Report 2024
2. Remuneration Policy summary and implementation for FY25
continued
Incentive plan operation
Incentive opportunity:
Total incentive maximum of up to 200% of salary. For FY25, the maximum will be 200% of salary for the CEO and 180%
of salary for the CFO.
Performance period and measures:
The award will be subject to a one-year performance period. The performance scorecard will include
a range of financial and non-financial measures.
For FY25, the performance scorecard will be made up of:
Measure
Weighting
Underlying PBT
50%
Risk
10%
Adviser measure
5%
Staff engagement score
5%
Governance, Regulatory and Sustainability
10%
Strategic/personal
20%
Deferral and holding period
: The award will be subject to a tiered deferral approach as follows:
n
For the first 30% of the overall maximum:
—
70% cash
—
30% deferred into shares for three years.
n
For the next 70% of the overall maximum, normally:
—
10% cash
—
10% deferred into shares for three years
—
80% deferred into shares for three years with an underpin and holding period.
Performance underpin:
A portion of the deferred awards will be subject to a three-year performance underpin. For awards made in FY25,
the performance underpin will include a quantitative profit-based underpin, progress against sustainability targets and regulatory performance.
If the underpin is not met the committee would determine the extent to which a reduction was appropriate, which could range from no reduction
to a 100% reduction. The committee would consider all relevant factors in making its determination.
Holding period:
For shares subject to a holding period, the holding period shall normally end following the fifth year after the start of the
performance period.
Malus and clawback:
Awards will be subject to malus and clawback provisions, which have been strengthened by broadening the range
of circumstances and increasing the length of time under which these may be applied. Malus and clawback provisions will apply for a period
of no less than four years from the beginning of the performance period and no less than five years for awards subject to a holding period.
Illustration for the CEO
The diagram below illustrates the operation of the new incentive plan for the CEO.
Portion deferred into shares
Portion paid in cash
Portion deferred into shares with underpin
Share awards
granted
Shares
released
Holding period
Performance
scorecard
Y0
Y2
Y1
Y3
Y4
Y5
Performance underpin applies
Holding period measured 5 years from the grant of shares
At maximum 72% of the total incentive would be deferred into shares
Directors’ remuneration report
continued
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Corporate governance
Financial statements
Other information
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Annual Report 2024
3. Directors’ Remuneration Policy
The Directors’ Remuneration Policy set out below is proposed for shareholder approval at the Annual General Meeting to be held in early 2025.
Subject to shareholder approval, the 2024 Remuneration Policy will take effect from the date of the 2025 AGM.
The Policy was developed by the committee over the course of 2024 and included significant shareholder consultation. Input was received from
management while ensuring that conflicts of interest were suitably mitigated. The committee also considered carefully corporate governance
developments. Input was provided by the committee’s appointed independent advisers. More background on the development of the Policy can
be found on pages 68 to 70 of the Remuneration Committee Chair’s statement and in the summary on pages 71 to 73.
The key change to the Remuneration Policy is the introduction of a new CIP. This includes an increased overall incentive opportunity maximum
of 200% of salary, significant deferral into shares, and the introduction of objective financial measures and holding periods. Under the pension
element the flexibility to allow executive directors to waive bonus into pension has been removed. Other minor changes have been made to
either aid administration or further clarify information.
Policy table
Purpose and link to strategy
Operation
Opportunity
Performance measures
Salary
To attract and retain
executive directors
with the necessary
skills, experience
and expertise.
Base salary is normally reviewed annually.
The Remuneration Committee may however
award an out-of-cycle increase if it considers
it appropriate.
There is no overall maximum
monetary opportunity or cap on
annual increase. Increases will take
into account a number of factors
including, but not limited to, the
scale of the role and the individual’s
experience, and increases awarded
to other staff.
None
Benefits
To attract and retain
executive directors and
support their wellbeing.
The Company offers a Death in Service
scheme to all staff with benefits set at four
times base salary.
The Company also offers all employees and their
families the opportunity to participate in a private
medical insurance scheme. The executive
directors have all participated in the medical
insurance and life assurance schemes.
Other benefits may include buying and selling
of holiday, child care vouchers, eye tests and
discounts for those with portfolios on the
Transact platform. The benefits provided may
be subject to amendment from time to time by
the committee.
Additional benefits may be provided from time
to time. This includes circumstances where an
executive director is deployed to or recruited
from overseas. The committee will consider
whether any additional benefits are appropriate
and proportionate.
There is no maximum
monetary value.
None
Pension
To attract and retain
directors for the
long-term and to
contribute to
retirement income.
Contributions are by way of a defined
contribution to the Group’s contractual
enrolment pension arrangement.
Executive directors are also able to contribute
to personal pensions by way of salary sacrifice
and will receive an employer contribution if they
do so.
Unlike the wider workforce, executive directors
are not able to sacrifice any element of variable
remuneration into their pension.
The maximum Company
contribution in respect of salary-
based employer pension
contributions is 12.3% of salary.
This is currently in line with that of
the wider workforce.
The pension contribution for
executive directors will not exceed
that of the wider workforce. Wider
workforce for the purposes of
pension contributions is defined
by the committee as it
considers appropriate.
None
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Purpose and link to strategy
Operation
Opportunity
Performance measures
Combined Incentive Plan (CIP)
To align reward to
performance and to
promote long-term
alignment to
shareholder interest.
The CIP is a combined incentive plan based
primarily on annual performance with deferral
and holding periods applying.
Annual performance targets are set by the
Remuneration Committee by reference to
business objectives.
Following annual assessment of performance
deferral will operate on a tiered basis as follows:
First Tier
For the first 30% of the overall maximum:
n
no more than 70% of the award will be
paid as cash following the annual
performance period
n
at least 30% deferred shares for three years
following the one-year performance period.
Second Tier
For the next 70% of the overall
maximum, normally:
n
10% cash
n
10% deferred shares for three years
following the one-year performance period
n
at least 80% deferred shares for three years
with a performance underpin and further
holding period.
For shares subject to a holding period, the holding
period shall normally end following the fifth year
after the start of the performance period.
Share awards will normally be granted at the
beginning of the annual performance period.
However deferred shares which are not subject
to a holding period may be granted following
the annual performance period.
The committee may award dividend equivalents
on share awards to the extent that they vest.
For deferred shares subject to a performance
underpin, the committee will determine the
underpin following annual assessment of
performance. The underpin will be assessed
after the three-year vesting period.
Cash and share awards will be subject to malus
and clawback provisions (as outlined below).
Maximum opportunity of 200%
of salary.
For FY25:
n
200% of salary for the CEO;
n
180% of salary for other
executive directors.
Performance measures may
include financial and
non-financial measures.
At least 40% of the maximum
opportunity will be based on
financial measure(s).
For financial measures
and other quantitative
metrics normally:
n
no more than 50% vests
for target performance;
n
no more than 25% vests
for threshold performance.
A portion of deferred shares
may be subject to a
performance underpin. If the
underpin is not met the
committee would determine
the extent to which a
reduction was appropriate
which could range from no
reduction to a 100% reduction
(i.e. full reduction of shares to
zero). The committee would
consider all relevant factors in
making its determination.
The committee may exercise
upwards or downwards
discretion in respect
of performance.
Directors’ remuneration report
continued
3. Directors’ Remuneration Policy
continued
Policy table
continued
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Annual Report 2024
Purpose and link to strategy
Operation
Opportunity
Performance measures
All-employee share plan
To align the interests of
all employees –
including executive
directors – and
shareholders.
Executive directors are eligible to participate
in the all-employee SIP in place on the same
terms as all employees. The scheme is
operated in line with HMRC guidance.
The SIP is subject to the limits set by
HMRC from time to time.
The committee may make an award
to participants of Free Shares up to
the value of 3% of salary or £3,600
(whichever is lower) and may permit
participants to subscribe for
Partnership Shares up to the value
of 1.5% of salary or £1,800
(whichever is lower). For every
Partnership Share purchased, the
Company has agreed to award two
Matching Shares. The £3,600 and
£1,800 limits are set by applicable
legislation and will be revised
automatically in the event of any
changes to the legislation.
None
Shareholding guidelines
To align the interest of
our executives with that
of our shareholders
In addition to the above, executive directors are expected to build up and hold shares equivalent to 100% of salary over
four years whilst they are in employment. Post-employment, this guideline will continue to apply in full for the first year
post-departure and at half of this level for the second year post-departure, reducing to zero after two years. This policy
does not apply to shares purchased with an executive’s own funds and applies only to awards that are awarded after
approval of the 2021 Remuneration Policy (2022 AGM).
Chair and Non-executive directors
Link to strategy
Operation
Opportunity
To attract non-
executive directors with
relevant experience to
ensure the appropriate
balance on the board
and the effective
management of
the Company.
Non-executive directors normally receive a base fee, with additional fees paid in
respect of specific board responsibilities including, but not limited to, chairing or
membership of board committees, acting as the SID, acting as the designated
non-executive director for workforce engagement or ESS, or appointment to
subsidiary boards.
Non-executive director fees are normally reviewed annually. The review is by
reference to the time commitment and responsibility of the role and will not
necessarily result in an increase.
Additional fees may be paid to non-executive directors to reflect increased time
commitment in certain limited circumstances, for example where a non-
executive director is a designate Chair of the board or a committee.
None of the non-executive directors, including the Chair, is eligible for
performance related remuneration or share awards.
The Company reimburses reasonable expenses incurred by the Chair and
non-executive directors in the performance of their duties. This includes (but
is not limited to) travel expenses and tax thereon and independent professional
advice. Non-executive directors may be provided with other benefits if
deemed appropriate.
There is no maximum fee. The fees
are subject to maximum aggregate
limits, as set out in the Articles
of Association.
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3. Directors’ Remuneration Policy
continued
Approved payments
The committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising any discretion
available to it in connection with such payments) notwithstanding that they are not in line with this Policy where the terms of the payment were:
(i)
in line with the previously approved Directors’ Remuneration Policy;
(ii)
agreed before the 2019 AGM (the date the Company’s first shareholder-approved Directors’ Remuneration Policy came into effect); or
(iii) at a time when the relevant individual was not a director of the Company and, in the opinion of the committee, the payment was not in
consideration for the individual becoming a director of the Company. For these purposes “payments” includes the committee satisfying
awards of variable remuneration and, in relation to an award over shares, the terms of the payment are “agreed” at the time the award
is granted.
Minor amendments
The committee may make minor amendments to the Policy (for regulatory, exchange control, tax, administrative purposes or to take account
of a change in legislation) without obtaining shareholder approval for that amendment.
Performance measures and targets
Our approach to performance measures and targets is designed to support our key principle to create, maintain and improve value to our four
groups of stakeholders – customers, shareholders, suppliers and employees. Performance measures and targets are considered in the context
of our commitment to our stakeholders, support the Company’s culture and ensure alignment with our strategy. Performance measures may
include measures and targets related to financial performance, risk, compliance, conduct, internal controls, ESG, stakeholder outcomes, delivery
of strategy and personal performance.
The committee may review and change the performance measures and performance underpins for future awards to ensure they continue
to support and align with the successful delivery of business strategy and objectives. Measures and targets set will normally include both
quantitative targets as well as targets where judgement is applied to assess performance. In line with regulatory requirements, risk adjustments
may apply to performance out-turns.
Targets may be adjusted to take into account factors such as a change in accounting standard or significant corporate event. The committee
may exercise its discretion to adjust outcomes where it believes that this is appropriate, including but not limited to: where outcomes are not
reflective of the underlying performance of the business, the underpins selected on award are no longer suitable, or the level of vesting does not
reflect the experience of the Group’s shareholders, employees or other stakeholders.
Share plan operation and discretion
The CIP will be operated in accordance with the relevant plan rules including any discretions therein. This includes, but is not limited to, the
adjustment of awards (as the committee considers it appropriate) in the event of any variation of the Company’s share capital, capital
distribution, demerger, special dividend or other event having a material impact on the value of shares.
The committee may adjust the operation of the CIP if it considers it appropriate to:
n
increase the proportion of an award that is deferred into shares.
n
increase the deferral or holding period time horizons.
n
determine the basis for the operation of the holding period, where shares may be held on a net or gross basis.
n
allow awards to be settled in cash at the committee’s discretion.
Malus and clawback
Malus and clawback provisions will apply to incentives, whereby the Company can reduce an unvested award, or clawback from a vested or
unvested cash or share award.
Malus and clawback provisions will apply for a period of no less than four years from the beginning of the performance period and no less than
five years for awards subject to a holding period. The ability to apply malus and clawback will include the following circumstances:
i.
the employee’s gross misconduct;
ii.
a material misstatement and/or significant downward revision in financial results;
iii.
an error in relation to the extent to which an award has vested and/or been granted;
iv.
payments based on erroneous or misleading data;
v.
the employee participated in or was responsible for conduct which resulted in significant losses to the Group;
vi.
the employee failed to meet appropriate standards of fitness and propriety;
vii. corporate failure;
viii. any other circumstance which the committee considers has (or would have if made public) a sufficiently significant impact on the reputation
of the Company to justify clawback applying; or
ix.
if the Company is required to operate clawback by any relevant regulator.
Directors’ remuneration report
continued
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78
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Annual Report 2024
Recruitment remuneration
When determining the remuneration package for a newly appointed executive director, the committee would seek to apply the following principles:
n
The package should be market competitive to facilitate the recruitment of individuals of sufficient calibre to lead the business.
However, the committee would intend to pay no more than it believes is necessary to secure the required talent.
n
When determining the design and composition of the package, the committee will consider the size, content and scope of the role,
the candidate’s skills, experience and expertise and the market rate for the role.
n
New executive directors will normally receive a base salary, benefits and pension contributions in line with the Policy table and would also be
eligible to join the CIP up to the limits set out in the Policy table.
n
Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous employer as a result of appointment,
the committee may offer compensatory payments or awards, in such form as the committee considers appropriate, taking into account all
relevant factors including the form of awards, expected value and vesting timeframe of forfeited opportunities.
n
The maximum level of variable remuneration which may be awarded (excluding any “buyout” awards referred to above) in respect of
recruitment is in line with the current maximum limit under the Policy table above.
n
Where an executive director is required to relocate from their home location to take up their role, the committee may provide assistance and
include benefits such as relocation (either via one-off or ongoing payments or benefits) or tax equalisation.
n
In the event that an internal candidate is promoted to the board, legacy terms and conditions would normally be honoured, including pension
entitlements and any outstanding incentive awards.
To facilitate any buyout awards outlined above, in the event of recruitment the committee may grant awards to a new executive director relying
on the exemption in the Listing Rules which allows for the grant of awards, to facilitate, in unusual circumstances, the recruitment of an
executive director, without seeking prior shareholder approval or under any other appropriate Group incentive plan.
The remuneration package for a newly appointed non-executive director would be in line with the structure set out in the Policy table for
non-executive directors.
Service contracts and appointment letters
All executive directors have written service contracts in place with an employing company in the Group. All non-executive directors have written
appointment letters with the Company. Shareholders may inspect the terms of the executive directors’ contracts or non-executive directors’
terms of appointment at the Company’s registered offices.
Executive directors’ service contracts are terminable on six months’ notice on either side. In the event that notice is given to terminate an
executive director’s contract, the Company may make a payment in lieu of notice or place the individual on garden leave. Entitlement to any
variable remuneration arrangements will be determined in accordance with the relevant plan rules and this Policy.
Executive directors’ service contracts do not make any other provision for termination payments. Provision is made for salary, life insurance,
private medical insurance, pension arrangements, holiday and sick pay.
It is the Company’s intention that the service contracts for any new executive directors will contain equivalent provisions.
The Chair and the non-executive directors have been appointed for three-year terms, subject to renewal thereafter. The Chair and non-executive
directors each have notice periods of three months and may receive fees during their notice period. The Chair and non-executive directors may
receive independent professional advice, on certain terms, paid for by the Company.
Payment for loss of office
In the event that the employment of an executive director is terminated, any compensation payment will be determined by reference to the terms
of the individual director’s service agreement and the individual’s statutory rights. The Company may at its discretion make a payment in lieu of
notice equal to base salary, pension, contributions (or cash equivalent) and the cost of providing life assurance and private medical benefits only.
The Company may, at the committee’s discretion, make the payment by way of a lump sum or by instalments over what would have been the
notice period and might be subject to mitigation.
The Company reserves the right to make such payment as may be necessary to discharge its legal obligations to the director, or by way of
settlement of any claim arising in connection with the cessation of a director’s office or service, including reimbursement of legal expenses.
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Annual Report 2024
3. Directors’ Remuneration Policy
continued
Payment for loss of office
continued
Combined Incentive Plan
Payments under the CIP may be made if the committee considers it appropriate. The normal approach would be as follows:
A “good leaver” means ceasing employment due to reasons such as death, injury, ill-health, disability, redundancy, or the employing company
or undertaking ceasing to be under the control of the Company, or any other reason at the discretion of the committee.
If an executive director leaves before the end of the annual performance period:
n
Where the committee determines the individual to be a “good leaver”, awards will continue to be subject to the performance targets and will
be pro-rated for time (taking into account the period of employment during the annual performance period). Awards may be deferred and
released on the normal release date to the extent that underpins are satisfied. However, the committee has discretion to determine the extent
to which an award is released, and to determine whether any award is made in cash or shares.
n
Other than where the individual is a “good leaver”, no cash bonus will be paid, no deferred shares will be granted and awards in respect of the
performance period will lapse in full.
If an executive director leaves after the end of the relevant annual performance period but before the normal release date of awards:
n
Where the committee determines the individual to be a “good leaver”, CIP unvested deferred awards will usually be released on the normal
release date to the extent that any performance conditions and underpins are satisfied. The committee has discretion to permit awards
to vest early on cessation of employment and to determine the extent to which the awards will be released e.g. pro-rating for time if
deemed appropriate.
n
If a director leaves other than as a “good leaver”, any unvested awards will ordinarily lapse on termination of employment.
n
Vested awards would normally be retained subject to any holding periods. The committee may determine an earlier release date in certain
circumstances. Where awards are in the form of nominal or nil cost options the committee may permit the executive director to retain and
exercise such awards until the end of the exercise period, or such earlier date as the committee may determine.
All staff SIP
SIP awards are not forfeitable on leaving and SIP shares will be transferred to the executive director upon leaving.
Change of control
On a change of control or voluntary wind-up of the Company, awards granted under the CIP, which have been earned in respect of previous
performance periods, will normally vest in full. The committee retains discretion to reduce awards or pro-rate to the proportion of the vesting
period up to the relevant corporate event. The committee will also have the discretion to determine the extent to which performance conditions
have been met, or may waive the performance conditions. The committee may determine an award under the CIP in respect of the annual
performance period within which the change of control occurs, taking into account the performance framework and pro-rated for time. The
committee has the discretion to treat a merger of the Company, or a demerger of the Company that is an exempt distribution, as an early vesting
event on the same basis as a change of control.
Consideration of employment conditions elsewhere in the Company
Remuneration arrangements are determined throughout the Group based on the same principle, which is to create, maintain and improve our
value to our four principal groups of stakeholders – customers, shareholders, suppliers and employees. Whenever possible we are committed to
sharing our success between employees, customers and shareholders through a balanced approach to responsible pricing, balanced
remuneration and sustainable dividends.
The committee is focused on ensuring reward is aligned to our culture and our strategy, and alignment with the wider workforce is a key feature
of our distinctive approach to remuneration.
Whilst the committee does not specifically consult with employees on its Remuneration Policy for executive directors, we are mindful of the
salary increases, the pension and benefits framework and incentive awards applying across the whole business when considering the
remuneration package of executive directors.
Consideration of shareholder views
The committee directly consulted with shareholders in the shaping of the Remuneration Policy across two consultation phases. The Chair of the
committee met with several investors to share the ethos behind the Policy, to explain the rationale for the structure of executive remuneration,
and to better understand shareholders’ perspective. The committee welcomes shareholders’ views on executive remuneration. In the
formulation of the Remuneration Policy, the committee took into account general good governance, best practice and shareholder and investor
guidance, and built upon shareholder feedback received during shareholder consultation to further refine and shape the Policy.
Directors’ remuneration report
continued
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Financial statements
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80
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Scenario charts
The chart below illustrates the amount the executive directors could receive in the first year in which the policy is in operation. The charts are
based on the following assumptions:
Pay scenario
Basis of calculation
Minimum
Fixed pay only, consisting of the salaries as at the beginning of 2025, benefits received in 2024
and employer pension contributions of 9% of salary.
On-target
Fixed pay, plus the expected value of the CIP award at target.
Maximum
Fixed pay, plus the maximum award under the CIP at an out-turn of 200% for the CEO and 180%
for the CFO.
Maximum + 50% share price appreciation
Maximum, as above, plus share price appreciation of 50% on the portion of the award subject to
measures relating to more than one year i.e. the portion subject to the underpin.
£2,000k
£1,800k
£1,600k
£1,400k
£1,200k
£1,000k
£800k
£600k
£400k
£200k
£0k
Minimum
On-target
Maximum
Maximum +
share price
appreciation
Minimum
On-target
Maximum
Maximum +
share price
appreciation
Fixed pay
CIP – no underpin
CIP – underpin and holding period
Share price appreciation
CEO
CFO
100%
100%
52%
33%
28%
24%
15%
36%
31%
15%
35%
30%
55%
33%
12%
38%
29%
33%
32%
25%
28%
14%
£595k
£438k
£798k
£1,159k
£1,351k
£1,140k
£1,685k
£1,990k
4. Annual Remuneration Report
This report details the remuneration arrangements in place for people who were directors of the Company during the financial year.
Wider workforce – IAD and T4A
Note that throughout this report, there are various references and/or comparatives to the wider workforce or the wider UK workforce. The structure
of reward for T4A employees continues to be gradually integrated into the IntegraFin business model. Whilst basic pay rise awards have been
benchmarked and aligned, variable remuneration continues to differ reflecting the different incentives applicable to the T4A business. Therefore
references to wider workforce currently excludes T4A employees save where expressly included. In some instances it also excludes our Australian
employees in IAD as Australian employment arrangements differ from those in the UK.
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Annual Report 2024
4. Annual Remuneration Report
continued
Governance
Committee membership during the year
The members of the committee during the year are shown below:
Date of appointment
Rita Dhut (Chair from 16 July 2024)
22 March 2023
Richard Cranfield
17 December 2019
Victoria Cochrane
16 July 2024
Robert Lister
1 September 2021
Christopher Munro (Chair until 16 July 2024)
19 January 2018 (stepped down 16 July 2024)
Role of the committee
The purpose of the committee is to review, set and agree aspects of the overall Remuneration Policy and strategy for the Group and the total
compensation package for certain officers and employees within the Group. It does so with a view to aligning remuneration with the successful
achievement of the Group’s long-term objectives while taking into account the Code, relevant regulatory requirements, market rates and value
for money.
By delegation from IFAL and ILUK, the committee monitors the content and application of the Company’s Remuneration Policy to individuals
whose roles bring them into scope of the FCA and PRA remuneration codes and the Corporate Governance Code. To the extent that the
committee does not approve their individual remuneration, the committee considers whether the total reward for each of those employee
remains compliant with the provisions of the relevant code.
In all its activities, the committee gives due consideration to laws and regulations, the provisions of the Code, the requirements of the
UK Listing Authority’s Listing, Prospectus and Disclosure Guidance and Transparency Rules and other applicable rules, as appropriate,
and to shareholder feedback.
Composition of the committee
Following the resignation of Christopher Munro in July 2024 the board appointed Rita Dhut as interim Chair of the committee and appointed
Victoria Cochrane as a member. The committee is comprised of three independent non-executive directors and the Chair of the board and
therefore the composition continues to comply with the requirements of the Code. Rita had served as a member of the committee for over a
year before becoming interim Chair.
The committee ensures that members take individual responsibility for identifying training appropriate to their needs and for keeping appropriate
records of such training. Each committee member provides copies of their training record to the Company Secretary annually and undertakes all
regulatory training requested by the Group.
Committee meetings and attendance
The committee meets at least twice annually and more frequently when required. The committee has met 16 times during this financial year.
Attendance by each member of the committee as at 30 September 2024 is set out in the board and committee attendance table on page 58.
The Head of Legal and Company Secretary, and the HR Director attend all meetings and other individuals such as the CEO, the Chief Risk Officer,
subsidiary board Chairs and external advisers may be invited to attend for all or part of any meeting. No director or employee participates in
decisions determining their own remuneration.
The committee’s work throughout the year
The committee has performed its duties with a view to aligning remuneration with the successful achievement of the Group’s long-term
objectives while taking into account the Code, relevant regulatory requirements, market rates and value for money.
The committee has undertaken the following this financial year:
Area of focus
Work conducted
Governance
n
Reviewing the committee terms of reference to ensure their continuing appropriateness.
n
Considering the FCA and PRA remuneration requirements in respect of employees who hold Senior
Management Functions within the business or who have been identified as Remuneration Code Staff.
Remuneration Policy
n
Reviewing and developing a new proposed Directors’ Remuneration Policy to be put forward for shareholder
approval at the 2025 AGM, taking into account the views of shareholders.
Awards
n
Reviewing the appropriateness of the proposed annual staff pay award.
n
Approving the proposed remuneration for the executive directors and senior managers.
n
Considering proposals for the remuneration of the CFO.
n
Considering the appropriateness of remuneration for Code staff and the staff pay award.
n
Reviewing and approving the making of deferred bonus awards to executive directors and senior managers.
n
Approving the grant of the Free Share award.
n
Considering and developing proposals for a restructure of variable remuneration.
Directors’ remuneration report
continued
Strategic report
Corporate governance
Financial statements
Other information
82
IntegraFin
Annual Report 2024
Committee evaluation
As raised in the 2023 evaluation, the committee has continued its work to more closely align the linkage of variable remuneration to individual as well
as Company performance. It has introduced clearer objectives and measures of performance in a framework incorporating stakeholder interests.
Feedback regarding the interaction between the committee and the regulated subsidiary boards continues to be considered and the Chairs
of the subsidiary boards attend meetings and contribute to agenda items which directly apply to those entities.
Statement of voting at the AGM
The Company remains committed to ongoing shareholder dialogue and takes a close interest in voting outcomes. The following table sets out
voting outcomes in respect of the 2021 Policy at the 2022 AGM and the FY23 DRR at the 2024 AGM:
Year
Resolution
Votes for/
discretionary
% of vote
Votes against
% of vote
Votes withheld
2024
Approve the Directors’ Remuneration Report
215,949,521
88.18
28,948,377
11.82
764
2022
Approve the Directors’ Remuneration Policy
216,703,830
91.90
19,098,977
8.10
1,361,995
How the Policy was applied in FY24
Summary of total remuneration – executive directors (audited)
Annual Bonus
Gross basic
Total fixed
Cash bonus
Deferred shares
Total variable
salary
Benefits
1
Pension
remuneration
LTIP
Other
2
remuneration
Total
Director
Year
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Alexander Scott
2024
489
1
36
526
129
142
—
8
279
Ƀ
805
2023
469
1
7
477
145
152
—
8
305
782
Jonathan Gunby
3
2024
489
1
36
526
121
133
—
8
262
788
2023
469
1
7
477
145
152
—
7
304
781
Euan Marshall
ɂ
2024
323
ȿ
1
29
353
100ɀ
107ɀ
—
347
Ɂ
554
908
2023
—
—
—
—
—
—
—
—
—
—
Michael Howard
2024
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
1
Benefits for the executive directors during the year comprised private health care and death in service benefits.
2
Other remuneration relates to Share Incentive Plan awards and the employee discount on platform charges and, in respect of Euan Marshall, buyout awards
in respect of forfeited remuneration.
3
Jonathan Gunby retired from the board on 30 September 2024.
4
Euan Marshall’s salary comprises £274,000 basic salary plus a £50,000 cash supplement additional pending finalisation of the new Remuneration Policy.
The £50,000 payment qualifies for bonus and pension but not for annual salary awards.
5
Euan Marshall’s annual bonus was calculated based on a percentage of year-end base salary and the £50,000 cash supplement, pro-rated for time in role. Annual bonus
also includes an additional performance-based amount to partially compensate for cash bonus forfeit from his previous employer as part of his buyout (see page 90).
6
Comprising buyouts in respect of variable pay forfeited (see page 90).
7
Euan Marshall was appointed to the board on 3 January 2024.
8
Figures have been rounded.
Michael Howard receives nil remuneration from the Company, but his employer, ObjectMastery Pty Ltd, receives a fee of AUD80k for his
executive appointment to IAD Pty Ltd, a company within the Group.
Base salary (audited)
The basic annual salaries for Alexander Scott, Jonathan Gunby and Euan Marshall were reviewed in accordance with the Company’s all-employee
pay review resulting in the following changes to the annualised salary figures. Salary adjustments were also made in respect of Alexander Scott
and Euan Marshall as part of the Policy review and as described on page 69:
Director
Basic annual
salary as at
1 June 2023
£’000
Salary effective
with effect
from 1 June
2024
£’000
Salary with
effect from
1 October/
1 November
2024
£’000
Alexander Scott
481
503
545
Jonathan Gunby
481
503
—
Euan Marshall
375
1
392
1
401
1
As part of a two part offer and in recognition of the anticipated increase to variable incentive arrangements, Euan Marshall received an additional cash
supplement of £50,000 per annum pending settlement of the new Directors’ Remuneration Policy. Upon implementation of the policy, Euan’s basic salary was
reset on 1 November and the additional fee is no longer payable. As set out on page 90 the overall outcome was a lower salary than the £425,000 which was
contractually agreed if the current policy maximum had continued.
Strategic report
Corporate governance
Financial statements
Other information
83
IntegraFin
Annual Report 2024
4. Annual Remuneration Report
continued
Incentive outcomes for FY24
Annual bonus (cash and deferred share) awards for FY24 (audited)
The committee considered Company and individual performance against the following four qualitative and quantitative anchors:
n
financial performance
n
stakeholder outcomes
n
risk and regulation (including environmental, social and governance)
n
strategy delivery
Each director’s delivery of their objectives was assessed against each anchor, as well as the Group’s delivery in the round and are adjusted for
any non-delivery. As a regulated business the committee also considers risk factors when making its determinations.
Within those anchors, the committee considered a wide variety of management information available to the board and its committees.
Whilst the committee considered metrics linked to each anchor, the essence of the process was to use the metrics to arrive at a balanced
judgement as to whether an award was warranted and, if so, at what level.
Director
Cash award
£’000
Deferred award
£’000
Alexander Scott
129
26% of salary
142
29% of salary
Jonathan Gunby
121
25% of salary
133
27% of salary
Euan Marshall
97
30% of salary
107
33% of salary
The cash and deferred award percentages are by reference to the basic salary on 30 September 2024. This is aligned to the approach taken for
all employees. For Euan, “salary” comprises base salary and the £50,000 cash supplement, pro-rated for time in role, and the amounts in the
table exclude buyouts (see page 90).
The bonus for Alexander is recommended by the board Chair. The bonuses for Jonathan and Euan are recommended by Alexander.
The committee considers detailed information which covers financial and non-financial performance, and whether the executive directors
had delivered appropriate stakeholder, financial and strategic performance, whilst also managing risk and maintaining internal controls.
For FY24 the assessment of whether cash and deferred bonus awards were justified was informed by the following metrics and performance
in the year:
Quantitative anchor (metrics and performance)
Out-turns
Financial
performance
Ensure effective financial performance of the Group by:
n
delivering financial performance against forecast, in
accordance with projections and market expectations.
n
sustaining service excellence within the context of
managed expenses.
n
managing costs and headcount effectively.
n
managing the dividend flow and distributable reserves/
regulatory capital from subsidiaries.
Measures of success
n
Net inflows
n
EPS
n
Expense ratio
n
Profit margin
n
Share price
n
Market cap
n
T4A user licences
n
Payment of a dividend
n
External factors outside of the Company’s control,
e.g. sudden FTSE and global movements
In FY24:
n
Financial performance was ahead of projections.
n
PBT margin has increased 4% from 46% FY23 to 48%
in FY24.
n
Service delivery continued to be regarded as market
leading by our Financial Advisers and has not impacted
on financial performance.
n
Dividends to shareholders have been paid in line
with policy.
n
Forward-looking projections indicate that the Company
is well placed to sustain performance over the coming
year taking into account stress-tested scenarios.
Directors’ remuneration report
continued
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Corporate governance
Financial statements
Other information
84
IntegraFin
Annual Report 2024
Quantitative anchor (metrics and performance)
Out-turns
Stakeholder
outcomes
Create, maintain and improve value to our four groups
of stakeholders – customer, shareholders, suppliers
and employees by:
n
identifying and executing opportunities for consistent
growth in gross and net inflows and sustained or
improved market share of net inflows.
n
sustaining our platform’s adviser-voted
industry awards.
n
ensuring adviser satisfaction with the
Company’s propositions.
n
creating a culture which encourages openness,
honesty, prevents harm and results in behaviours that
are consistent with the Group’s values.
n
maintaining a staff attrition rate that remains
within appetite.
n
ensuring that the Group does not risk capital
beyond reasonable levels, does not create any
commercial conflict or make it difficult to meet
regulatory responsibilities.
Measures of success
n
Net inflows
n
Adviser + user/client retention
n
Market share of inflows
n
Adviser-voted awards received
n
Market research results (internal and external)
n
Staff attrition rates
n
Staff engagement survey results
n
Under performance rates
n
Shareholder engagement
n
Performance and management of third party suppliers
In FY24, the Company delivered the following:
Clients and advisers
n
Market share of gross inflows remained above 10% and
net flows make up approximately 25% of the market.
n
Transact rated best platform for advisers in the
Professional Adviser Awards and won Schroders
UK Platform award 2023 “Best Platform Provider
(AUM over £40 billion)”.
n
Clients benefited from removal of buy commission,
removal of the differential charging for new cash
and switch cash and further reduction in fee for
non-advised clients.
n
Clients and advisers benefit from continued investment
in the development of digital onboarding tools.
Employees
n
100% of eligible employees took up the SIP Free Share
award and 69.79% took up the Partnership Share award.
n
Employee engagement response rates remained high.
Shareholders
n
The Company distributed dividends in accordance with
its dividend policy.
n
Share price has shown reasonable growth over the year.
Suppliers
n
The Group settled around 90% of its invoices within
30 days of receipt in the last fiscal year.
No one stakeholder is prioritised over the others and the
committee considers the balance of the outcomes for
stakeholders when determining the appropriateness of
variable remuneration awards.
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85
IntegraFin
Annual Report 2024
Quantitative anchor (metrics and performance)
Out-turns
Risk, regulation
and ESG
n
Effective leadership of risk management by reference
to all capital liquidity, operational resilience and
compliance with regulatory requirements applicable to
the Group, including those applicable to the Company
as a UK listed plc and those applicable to our UK
investment firm, UK insurance firm and Isle of Man
insurance firm.
n
Demonstrable adherence to internal, legal and
regulatory policies, law and rules.
n
Effective management of internal governance
of the Group both at board level and through the
subsidiaries and management structure and the
interrelationship with the delivery of the strategy
and financial performance.
n
Making moral decisions and demonstrating a
values-driven approach that seeks to prevent rather
than cure.
n
Effective delivery of the environmental response plan.
Measures of success
n
Complaint and error metrics
n
Review of non-compliance or sanctions affecting
the Group
n
Customer satisfaction
n
Internal audit reports and findings, and the
resolution thereof
n
Performance against Risk control self-assessment
n
Progress on environmental response plan
In FY24 the Company delivered:
n
Ongoing engagement with the FCA, the PRA and the
IoM FSA.
n
Internal Audit programme completed.
n
Risks including regulatory compliance managed within
appetite. Minor risk appetite breaches promptly
identified and addressed.
n
TCFD reporting reviewed and enhanced. The above
achievements are also underpinned by the following:
n
The Group has shown appropriate adherence to internal,
legal and regulatory policies, laws and rules and board
reports demonstrate appropriate understanding and
implementation of regulatory change projects.
n
The additional investment in IFAL to effectively
manage capital balances across the Group was
managed effectively
The committee considers all of these aspects when
determining the appropriateness of a variable remuneration
award. No individual weighting is applied to one or more of
these aspects so that the committee has the flexibility to
adjust the award by reference to the impact of internal and
external constraints on the delivery of each.
The committee considers the steps taken to recruit and
retain talent within the organisation. In doing so, the
committee receives reports on staff numbers, recruitment
and retention, and internal development opportunities by
way of promotions and movement between departments
and business functions.
The committee considers the appropriateness of executive
reward in the context of these measures.
Strategy delivery
Ensuring that the Group and each of its subsidiary
companies achieves its strategic goals through:
n
continuous improvement of the platform functionality,
responding to customer feedback.
n
enhanced resilience of the core platform and
associated services.
n
increased number of advisers and clients using CURO.
n
growth of ancillary services to enhance the
adviser and client experience.
Measures of success
n
Assessment of the ancillary services offered to clients
and advisers
n
Management of expenses
n
Number of retained advisers and clients
n
Number of new advisers and clients
n
Number of advisers and clients using CURO
In FY24, the key strategic deliverables by the
Company were:
n
Delivery of organic growth in the context of persistent
inflation and a weak market.
n
Improvement in service delivery.
n
Continuing the development of the enhanced CURO
proposition on Power Platform software.
n
Continued delivery of system enhancements.
Directors’ remuneration report
continued
4. Annual Remuneration Report
continued
Incentive outcomes for FY24
continued
Annual bonus (cash and deferred share) awards for FY24 (audited)
continued
Strategic report
Corporate governance
Financial statements
Other information
86
IntegraFin
Annual Report 2024
How the committee’s discretion was applied
In determining the award for the executive directors, we considered the Group’s performance against its strategic objectives, the business plans
approved by the board, market consensus, regulatory requirements and the current state of financial markets. The committee weighed up the
performance of the Company in FY24 and the future projections for FY25. Consideration was given to both financial and non-financial
performance and the committee considered whether the proposed awards were sustainable.
We sought assurance that the recommendations were made in accordance with a balanced view of achieved and future profitability
underpinned by the interests of all stakeholders. We ensured that the awards were consistent with the expectations of our regulators and our
other stakeholders regarding a proportionate reward focused on sustainable delivery over the medium to long term and not based on
inappropriate risk taking.
The committee concluded that payment of an award was appropriate given the strong financial performance against plan and the performance
of the platform in a challenging market and economic environment.
Based on a holistic assessment of Group performance, including consideration of the 2024 outcomes set out in the table above, and individual
performance, the committee granted the following awards:
Alexander Scott was granted an overall award (cash and deferred bonus shares) equal to 55% of salary. In making this award, the committee had
particular regard to the overall financial performance of the platform, the performance of T4A against plan and the delivery of stakeholder
outcomes. The committee allocated the award as 26% cash and 29% deferred into shares.
Jonathan Gunby was granted an overall award (cash and deferred bonus shares) equal to 52% of salary. In making this award, the committee
had particular regard to the strong platform performance and service enhancements, alongside progress on the development of CURO and
delivery of stakeholder outcomes. The committee allocated the award as 25% cash and 27% deferred into shares.
Euan Marshall was granted an overall award (cash and deferred bonus shares) equal to 64% of salary. In making this award, the committee had
particular regard to the strong financial control, his early impact on the business and contribution to the management team. The committee
allocated the award as 31% cash and 33% deferred into shares.
The deferred bonus award is granted following the announcement of the Group’s annual results. Awards will vest after three years and will be
subject to malus and clawback provisions as detailed in the DRP.
In certain circumstances, the committee has the right to reduce or withhold the deferred bonus award. This includes but is not limited to where there
has been a material misstatement and/or significant downward revision in the financial results, where the calculated number of shares awarded to an
individual director is determined to be too high, or where the Award Holder has engaged in misconduct justifying the director’s summary dismissal.
LTIPs
The Company did not operate an LTIP in FY24, and no award was made to executive directors that was dependent on performance conditions
relating to more than one year.
SIP
Executive directors can participate in the SIP. The board may make an award to participants of Free Shares up to the value of 3% of salary
or £3,600 (whichever is lower) and may permit participants to subscribe for Partnership Shares up to the value of 1.5% of salary or £1,800
(whichever is lower). For every Partnership Share purchased, two Matching Shares are awarded. The £3,600 and £1,800 limits are set by
applicable legislation and will be revised automatically in the event of any changes to the legislation.
During FY24, the maximum SIP award was granted to qualifying employees (including Alexander Scott and Jonathan Gunby). The Partnership
and Matching Share award was made on an evergreen basis and therefore all qualifying employees will be able to continue to participate in the
plan unless it is revoked by the committee. Based on the Group’s performance in FY24 the board has not revoked that award. The board has
considered the Group’s performance in FY24 and, with the approval of the Remuneration Committee, has approved the making of a further
maximum SIP Free Share award to qualifying employees (including Alexander Scott) when the Company is not in a closed period. This will be
following the announcement of the Group’s financial results. Euan Marshall has not yet met the service criteria to be eligible to participate in
awards under the scheme.
Pension contributions
In the FY24 performance year, the employer’s pension contribution for Alexander Scott and Jonathan Gunby was £35,665 and £29,194 for
Euan Marshall. At 7.29% of basic salary, for Alexander Scott and Jonathan Gunby, and 9% for Euan Marshall, the contributions were no more
than the minimum level contributed in respect of the wider workforce.
The minimum employer contribution available to all employees in FY24 was 9%. For employees other than executive directors the Group has
made contributions to personal pension arrangements for those employees who have sacrificed salary. Whilst this benefit is available to
executive directors, none of the current executive directors has sacrificed salary.
Strategic report
Corporate governance
Financial statements
Other information
87
IntegraFin
Annual Report 2024
4. Annual Remuneration Report
continued
Shareholding guidelines
In-employment
In the 2021 DRP, the Company adopted in-employment shareholding guidelines pursuant to which a serving executive director must build up
and maintain a holding of IntegraFin shares with a value (as determined by the committee) at least equal to 100% of salary over a period of four
years. Unvested share options awarded under deferred bonus arrangements and shares subject to other share awards which are no longer
subject to any performance condition (including any exercisable but unexercised awards) count towards the requirement, on a net of assumed
tax basis where relevant.
Individual shareholdings for each of Alexander Scott, Jonathan Gunby and Michael Howard are set out on page 92 and all meet the minimum
requirements under the policy. As a recent joiner to the Company, Euan Marshall currently holds shares below the minimum. In line with our
policy, the expectation is that he will build up to his guideline over a period of four years.
Post-employment
The Company has adopted post-employment shareholding guidelines pursuant to which an executive director must retain for 12 months
following cessation of employment such of their “relevant shares” as have a value (as determined by the committee) equal to the in-employment
guidelines most recently applicable to them, and for a further 12 months such of their “relevant shares” as have a value (as determined by the
committee) equal to 50% of the in-employment guidelines most recently applicable to them. Shares which the executive director has purchased
or which they acquire pursuant to share plan awards granted before this Policy came into effect are not “relevant shares” for these purposes.
The committee retains discretion to vary the shareholding guidelines to take account of compassionate circumstances.
Percentage change in remuneration of directors compared to the average employee
The table below shows the percentage movement in the salary, benefits and annual bonus for the directors compared to that for the average
Group employee over the past five years.
The SIP scheme is provided to all UK and Isle of Man employees, including executive directors, but excluding T4A and is not included above.
FY24
FY23
FY22
FY21
FY20
Director
Salary/
Fees
%
Benefits
Bonus
%
Salary/
Fees
%
Benefits
Bonus
%
Salary/
Fees
%
Benefits
Bonus
%
Salary/
Fees
%
Benefits
Bonus
%
Salary/
Fees
%
Benefits
Bonus
%
Executive
directors
Alexander Scott
4.70
23.92
(8.80)
4.00
31.25
11.71
7.00
26.60
(10.10)
2.50
19.50
(0.70)
56.40
—
63.80
Jonathan Gunby
4.70
23.92
(14.50)
4.00
31.25
1.76
7.00
26.60
(1.40)
2.50
1
19.50
0.60
N/A
N/A
N/A
Michael Howard
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Euan Marshall³
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Non-executive
directors
ȿ
Caroline Banszky
18.75
—
—
—
—
—
33.30
—
—
—
—
—
—
—
—
Victoria
Cochrane
21.20
—
—
—
—
—
29.20
—
—
—
—
—
—
—
—
Richard Cranfield
28.57
—
—
—
—
—
40.00
—
—
—
—
—
—
—
—
Rita Dhut
23.04
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Robert Lister
29.22
—
—
—
—
—
28.30
—
—
—
—
—
—
—
—
Christopher
Munro
12.07
—
—
—
—
—
45.00
—
—
—
—
—
—
—
—
Average
employee
(excl. T4A)
4.50
27.92
3.20
7.30
31.25
(37.46)
2
7.30
26.60
16.75
3.20
19.50
17.98
2.90
5.50
12.80
Notes to the table:
Alexander Scott’s basic remuneration increased in 2020 upon appointment as CEO.
1
Jonathan’s basic salary increased 2.5% year on year, however in 2020 Jonathan purchased annual leave and therefore received lower basic and variable
remuneration in 2020 than Alexander.
2
The reduction in the average employee bonus award is reflective of the restructure of employee reward to increase basic and reduce the variable proportion to
a targets met out-turn of 10% (2022: 20%).
3
Euan Marshall was appointed to the board on 3 January 2024.
4
Details of non-executive director fee changes can be found on page 93.
Michael Howard receives nil remuneration from the Group but his employer, ObjectMastery Pty Ltd, receives a fee of AUD80k for his executive
appointment to IAD Pty Ltd, a company within the Group. This fee remained consistent until FY24.
The change in salary/fees for the directors is based on the salary/ fees earned in each financial year.
Directors’ remuneration report
continued
Strategic report
Corporate governance
Financial statements
Other information
88
IntegraFin
Annual Report 2024
The table does not include salary and benefits movement for IAD employees employed in Australia as their employment benefit package differs
from the UK staff package in recognition of different compensation and benefit rules in Australia. It has therefore been deemed inappropriate to
include their remuneration in this comparison. Similarly, the “average employee” calculation in the table excludes T4A due to slight differences in
the remuneration structure.
Christopher Munro retired from the board on 16 July 2024.
CEO pay ratio table
The following table sets out the ratio of the CEO’s pay to each of the Group’s median, lower quartile and upper quartile pay for UK employees for
the last five years.
Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
FY24
Salary
Option A
12:1
10:1
7:1
Total remuneration
17:1
13:1
9:1
FY23
Salary
Option A
11:1
8:1
7:1
Total remuneration
17:1
13:1
9:1
FY22
Salary
Option A
14:1
10:1
6:1
Total remuneration
16:1
12:1
8:1
FY21
Salary
Option A
14:1
11:1
7:1
Total remuneration
16:1
13:1
9:1
FY20
Salary
Option A
17:1
13:1
9:1
Total remuneration
18:1
15:1
10:1
The salary and total remuneration ratios for 2024 above are based on the following figures:
FY24
CEO
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
Salary
488,926
39,633
50,033
71,067
Total Remuneration
804,567
47,673
63,118
88,928
The CEO pay ratios were calculated using ‘Option A’, set out in the Companies (Miscellaneous Reporting) Regulations 2018. Under this method,
the full pay and benefits of each UK employee were used to identify those employees that represented the Group’s median, lower quartile and
upper quartile pay for UK employees. The full pay and benefits of these employees were then used to calculate the ratios as at 30 September
2024. The Group elected to use Option A as its method of calculation as it felt that using the full pay and benefits of all employees was the most
accurate method of identifying those employees that represented the Group’s mean median, lower quartile and upper quartile pay for UK
employees. To determine the full-time equivalent pay and benefits of non-standard workers, part-time workers’ remuneration was grossed up
to the equivalent full-time pay.
The ratio for the 25th and median categories have increased whilst the 75th percentile has remained the same in FY24. The reason for the
change to the 25th and median is a net increase in hiring into entry level roles, relative to senior hiring, when comparing full year heads to the
prior year. There has been no overall change to the reward structure or benefits provision in the year.
Workforce engagement
The committee has sight of the workforce views through consideration of the out-turns from the workforce engagement survey and the
learnings from engagement with the workforce at organised events.
When determining the Remuneration Policy and arrangements for executive directors, the committee also considers:
n
remuneration elsewhere in the Group to ensure that remuneration structures are suitably aligned;
n
changes in remuneration (salary, benefits and bonus) of the wider workforce compared with that of directors; and
n
any material changes to benefit or pension provisions to the wider workforce.
Strategic report
Corporate governance
Financial statements
Other information
89
IntegraFin
Annual Report 2024
4. Annual Remuneration Report
continued
Relative importance of spend on pay (audited)
The following table sets out the percentage change in profit, dividends paid and overall spend on pay in the year ending 30 September 2024,
compared to the year ending 30 September 2023.
FY23
FY24
Percentage
change
IFRS profit after tax
49.9
52.1
4%
Dividends
33.7
33.7
0%
Employee remuneration costs
46.0
48.4
5%
Euan Marshall’s joining arrangements
At the time of Euan’s appointment, the committee had begun the process of reviewing the variable framework for executive directors. In order to
ensure we had flexibility in how we developed the policy, we structured Euan’s package as a two part offer with a base salary of £375,000 and a
cash supplement of up to £50,000, but with a contractual commitment that salary would become £425,000 if the current incentive policy
maximum were to continue.
The salary of £375,000 plus a cash supplement of £50,000 was intended to mirror a salary of £425,000. Therefore the cash supplement was
bonusable and pensionable.
When the design of the new Policy was finalised, to ensure alignment to deliver the expected total compensation out-turns, the committee
revised his base salary to £400,611 with effect from 1 November 2024. The final salary was therefore, as anticipated, set at a level lower than
the salary of £425,000 which was contractually agreed if the current policy maximum had continued.
His pension was set at 9% of salary.
The committee approved a buyout of Euan Marshall’s forfeited LTIP awards upon joining the Company.
Date
Value
Value of shares options to be awarded on date of joining, vesting after three years (37,995 share options)
£115,500
First payroll date after employment (cash)
£21,750
First year anniversary of employment (cash)
£57,000
Second year anniversary of employment (cash)
£57,000
Third year anniversary of employment (cash)
£57,000
Total
£308,250
At the time that the buyout was made the Company adhered to the maximum limits under the deferred bonus arrangement, with excess
comprising a cash award. Following adoption of the new plan rules it is intended that future buyouts will be made in shares.
The time horizons for the settlement of the awards mirror, or are longer than, those forfeited. Awards forfeited were contingent on only
continued employment together with a performance underpin. Payment of buyout awards is contingent on continued employment with the
Company until the designated payment date, subject to forfeiture in the event of poor performance. In line with the 2021 Policy, awards are also
subject to malus and clawback in other circumstances.
On joining, Euan also forfeited a cash bonus in respect of his previous employment and the committee considered it appropriate that he would
be partially compensated. Taking into account that the year end of his former employer was 31 March, on joining 3 January 2024 Euan forfeited
a bonus from his previous employer in respect of 9 months of the financial year. This was partially compensated by permitting Euan to
participate in an additional maximum incentive of £65,800, equating to an additional c.1.8 months of annual bonus during IntegraFin’s financial
year. This compensatory participation was less than 50% of the cash bonus forfeited. His performance outcome for the year was 63% and
therefore, following the year end, this resulted in an out-turn of £41,500 in respect of this additional element. To align with shareholders, this
additional compensatory amount was delivered primarily in deferred shares, via an award of £38,775 in deferred shares and £2,688 cash.
Directors’ remuneration report
continued
Strategic report
Corporate governance
Financial statements
Other information
90
IntegraFin
Annual Report 2024
Payments to past directors (audited)
Except as described below in relation to Jonathan Gunby, there were no payments to past directors during the year. Ian Taylor’s estate exercised
43,186 nil cost options which related to vested options transferred to his estate on 08 August 2023.
Payments for loss of office (audited)
No director received payment for loss of office during the year.
Arrangements for Jonathan Gunby
Jonathan Gunby stepped down from the board on 30 September 2024. Jonathan will remain an employee of the Group and CEO of IntegraFin’s
subsidiary, Integrated Financial Arrangement Ltd, which operates the Transact platform.
Jonathan’s deferred share awards will continue to subsist subject to continued employment, and will be released on the original timetable.
As a former director, Jonathan will be required to comply with post-employment shareholding requirements in line with the Policy.
Share Awards made during the year (audited)
Type of interest awarded
Basis on which award made
1, 2
Date of award
Face value
awarded
3
Percentage
receivable for
minimum
performance
Number of
shares awarded
End of
deferral period
Alexander Scott
Deferred
bonus
Conditional
share award
33% salary less award
of SIP Free and
Matching Shares
21.12.2023
£153,643
100%
51,317
21.12.2026
SIP
Free Shares
Partnership
Shares
Matching
Shares
Dividend
Shares
3% (Free and Matching
Shares) of salary
subject to maximum of
£3,600 each per annum
and 1.5% (for
Partnership Shares)
subject to a maximum
of £1,800 per annum
08.01.2024
23.01.2024
23.01.2024
29.01.2024
08.07.2024
£3,597
£1,800
£3,600
100%
1192
607
1214
283
130
N/A
4
Jonathan
Gunby
Deferred
bonus
Conditional
share award
33% salary less award
of SIP Free and
Matching Shares
21.12.2023
£153,643
100%
51,317
21.12.2026
SIP
Free Shares
Partnership
Shares
Matching
Shares
Dividend
Shares
3% (Free and Matching
Shares) of salary
subject to maximum of
£3,600 each per annum
and 1.5% (for
Partnership Shares)
subject to a maximum
of £1,800 per annum
08.01.2024
23.01.2024
23.01.2024
29.01.2024
08.07.2024
£3,597
£1,800
£3,600
100%
1192
607
1214
283
130
N/A
4
Euan Marshall
Buyout
Conditional
share award
Buyout of forfeited LTIP
03.01.2024
£115,500
100%
37,995
03.01.2027
1
Deferred share awards form part of the annual incentive, for which awards were determined based on performance to 30 September 2024.
2
SIP Free Share awards were determined based on Group performance to 30 September 2024. SIP Partnership and Matching awards are loyalty awards.
The awards are evergreen and are purchased monthly and will continue unless revoked by the Remuneration Committee. The award date shown is the first
purchase date following publication of the Company’s Annual Report and financial statements but the amount reflects the award for the full financial year.
3
The face value of the deferred bonus share award is calculated using average share price from 15 December 2023 to 19 December 2023 which was £2.96.
The face value of the Free Shares is calculated using the share price paid by the SIP administrator on the date of purchase which was £3.02. The face value of
the Partnership and Matching Share award is calculated using the total number of Partnership and Matching Shares bought on behalf of the relevant individuals
during the financial year and an average share price for matching share purchases.
4
The SIP is operated in line with HMRC guidance.
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Corporate governance
Financial statements
Other information
91
IntegraFin
Annual Report 2024
4. Annual Remuneration Report
continued
Shareholding requirements and directors’ share interests (audited)
No share awards other than the all staff SIP and the deferred bonus Share Option Plan award were awarded to Alexander Scott, Jonathan Gunby
or Michael Howard during the financial year.
Upon joining the Company but prior to his appointment to the board, Euan Marshall received 37,995 shares in respect of a partial buyout of his
LTIP awards at his prior employment.
The Company requires executive directors to build up a holding of one year’s salary equivalent in shares and/or share options within four years
of appointment. In assessing whether an individual director meets this requirement, the Company will include shares held in the director’s own
name, those held in any pension over which the director directs the investment profile, and those unvested shares which are not subject to
performance conditions, held in an employee share plan.
Director/
Connected person
1p Ordinary
Shares
Total 2018
SIP shares
1
Deferred bonus
share Scheme
(no performance
conditions)
Deferred bonus
share Scheme
(performance
condition
s)
Vested but
unexercised
Options
exercised
Shares held
at 30.09.2024
Total
Percentage of
basic pay/fee
held in shares
Shares held
at 30.09.2023
Total
Percentage of
basic pay/fee
held in shares
Alexander Scott
1,148,260
14,839
197,214
—
71,137
—
1,360,313
1014%
1,305,570
652%
Jonathan Gunby
2
803,665
14,839
196,428
—
70,351
—
1,014,932
757%
960,189
479%
Michael Howard
3
32,000,000
—
—
—
—
—
32,000,000
282,392%
32,000,000
175,532%
Euan Marshall
—
—
37,995
—
—
37,995
-
N/A
N/A
Caroline Banszky
7,500
—
—
—
—
—
7,500
-
7,500
-
Victoria Cochrane
3,750
—
—
—
—
—
3,750
-
3,750
-
Richard Cranfield
4
20,000
—
—
—
—
—
20,000
-
20,000
-
Rita Dhut
15,000
—
—
—
—
—
15,000
-
15,000
-
Robert Lister
6,015
—
—
—
—
—
6,015
-
6,015
-
1
Includes dividend reinvestment shares relating to SIP shares.
2
Includes Cheryl Gunby’s shareholdings and family trusts controlled by Jonathan.
3
Michael Howard’s shareholding is shown as a percentage of the fee paid to ObjectMastery for his services to the IHP board.
4
Includes Gillian Cranfield’s shareholdings.
The value of each director’s shareholding has been calculated by reference to the average of the share price over the final three months of the
financial year (£3.64482).
The value of unvested and unexercised share options is shown net of income tax at the additional rate and employee’s NI.
The rate for Michael Howard has been calculated by reference to the exchange rate on 30 September of the relevant financial year.
No directors have any other vested or unvested share options as at the end of the FY24.
Aside from regular purchases monthly
of Partnership Shares and allocation of corresponding Matching Shares under the Share Incentive Plan, there
were no changes to the executive directors or non-executive directors’ interests in IntegraFin shares during the period from 1 October 2024
to 17 December 2024.
Shareholder return performance graph and CEO pay over the same period
This graph shows the Company’s total shareholder return performance from Admission to 30 September 2024.
The Company has chosen to show total shareholder return against the FTSE 250 total return over the same period, as IntegraFin is a member
of the index and the board considers this to be the most appropriate comparator.
Directors’ remuneration report
continued
Strategic report
Corporate governance
Financial statements
Other information
92
IntegraFin
Annual Report 2024
Total shareholder return performance vs FTSE 250 since 2 March 2018
250
200
150
100
50
0
Feb 18
Apr 18
Jun 18
Aug 18
Oct 18
Dec 18
Feb 19
Apr 19
Jun 19
Aug 19
Oct 19
Dec 19
Feb 20
Apr 20
Jun 20
Aug 20
Oct 20
Dec 20
Feb 21
Apr 21
Jun 21
Aug 21
Oct 21
Dec 21
Feb 22
Apr 22
Jun 22
Aug 22
Oct 22
Dec 22
Feb 23
Apr 23
Jun 23
Aug 23
Oct 23
Dec 23
Feb 24
Apr 24
Jun 24
Aug 24
IHP
FTSE 250 TR
IHP vs FTSE 250 Total return
The following table shows the history of the CEO’s remuneration since admission:
CEO Remuneration
CEO single figure
of remuneration
Annual bonus
payout (as a %
of maximum
opportunity)
LTIP vesting
out-turn (as a %
of maximum
opportunity)
FY24
£805k
55%
N/A
FY23
£782k
62%
N/A
FY22
£695k
52%
N/A
FY21
£704k
62%
N/A
FY20
£639k
72%
N/A
FY19
£751k
82%
N/A
FY18
£769k
83%
N/A
Note to the table
The figures for FY18 and FY19 relate to the previous CEO, Ian Taylor. The figures for FY20 to date relate to the current CEO, Alexander Scott.
Fees for the Chair and non-executive directors (audited)
Non-executive directors
Year
IHP Fees
£’000
IHP Benefits
£’000
Subsidiary Fees
£’000
Subsidiary Benefits
£’000
Total remuneration
£’000
Richard Cranfield
2024
180
0
0
0
180
2023
140
0
0
0
140
Rita Dhut
2024
86
0
0
0
86
2023
70
0
0
0
70
Christopher Munro
1
2024
80
0
18
0
98
2023
80
0
7
0
87
Victoria Cochrane
2024
94
0
0
0
94
2023
78
0
0
0
78
Robert Lister
2024
82
0
18
0
100
2023
70
0
7
0
77
Caroline Banszky
2024
95
0
0
0
95
2023
80
0
0
0
80
1
Christopher Munro retired from the board on 16 July 2024.
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Corporate governance
Financial statements
Other information
93
IntegraFin
Annual Report 2024
4. Annual Remuneration Report
continued
Fees for the Chair and non-executive directors (audited)
continued
Chair and non-executive director fees were reviewed in December 2023 and adjusted with effect from 1 October 2023.
For the Chair of the board the review reflected consideration of the market context and appropriate peers in the financial services sector.
In January 2024, the committee determined that a stepped approach was most appropriate, and the fee was adjusted from £140,000 to £180,000
with effect from 1 October 2023 and at the end of the financial year the committee approved a further step increase to £220,000 with effect
from 1 October 2024.
The fees for non-executive directors were also reviewed. In December 2023 the base fee was reduced from £70,000 to £65,000, with more
emphasis placed on chairs of committees and committee membership. This approach is considered to better reflect the time commitment
of the non-executive directors. A stepped approach was taken to the review, with additional increases made at the end of FY24. The
comprehensive review took into account the market context and appropriate peers in the financial services sector, and in particular reflected
the additional time commitment and responsibilities arising in the context of FCA and PRA regulatory requirements, and the Group’s
governance structure.
Element of remuneration by director
FY24
£
FY25
£
Chair
180,000
220,000
Base fee
65,000
66,000
Senior Independent non-executive director
10,000
10,500
Audit and Risk Committee Chair
30,000
42,000
Audit and Risk Committee member
10,000
15,000
Nomination Committee Chair
N/A
N/A
Nomination Committee member
2,500
5,000
Remuneration Committee Chair
12,000
27,000
Remuneration Committee member
4,000
7,500
Designated non-executive director
5,000
6,000
Additional fees may also apply where non-executive directors sit on subsidiary boards.
Advisers
Deloitte LLP (Deloitte) is retained as adviser to the Remuneration Committee. Deloitte is a founding member of the Remuneration Consultants
Group and voluntarily operates under the Code of Conduct in relation to executive remuneration consulting in the UK.
For FY24, total fees for advice to the Remuneration Committee were £121k, with fees on a time and materials basis. During the year Deloitte
also provided IFAL with consulting services on regulatory matters.
Deloitte was appointed by the committee, and the committee is satisfied the advice provided by Deloitte is objective and independent.
Management may attend meetings as required, including but not limited to the CEO, HR Director, Head of Legal and Chief Risk Officer.
Directors’ remuneration report
continued
Strategic report
Corporate governance
Financial statements
Other information
94
IntegraFin
Annual Report 2024
Directors’ report
The directors present their report and financial statements
for the year ending 30 September 2024.
The content of the ‘Management Report’ required by the FCA Disclosure and Transparency
Rule DTR4.1 is in the Strategic Report and the Governance section of the Annual Report and
financial statements, which also contains details of likely future developments identified by the
board. This information is shown in the Strategic Report rather than in the Directors’ Report
under sections 414 C (11) of the Companies Act.
The Corporate Governance Report on pages 51 to 94 forms part of the Directors’ Report.
Information disclosed in accordance with the requirements of the applicable sections of the
FCA Listing Rule LR9.8 (Annual Financial Report) can be found here:
Details of Long-Term Incentive Schemes
The Directors’ Remuneration Report
Directors’ Interests in the Company’s Shares
The Directors’ Remuneration Report
Major Shareholders’ Interests
Directors’ Report
Non-executive directors’ terms of appointment
Directors’ Report
Directors’ transactions in the Company’s Shares
Directors’ Report
Details of non-financial reporting
Corporate Social Responsibility Report
Principal risks
and uncertainties
The review of the business and principal risks
and uncertainties are disclosed in the
Strategic Report at pages 45 to 47.
Internal control and risk
management systems
A description of the Group’s internal control
and risk management systems in relation to
the financial reporting process is set out on
pages 43 and 44 of the Strategic Report.
Directors
The executive directors who served during
the financial year were Alexander Scott,
Jonathan Gunby (retired on 30 September
2024), Mike Howard and Euan Marshall.
The non-executive directors who served during
the financial year were Richard Cranfield,
Caroline Banszky, Victoria Cochrane,
Rita Dhut, Christopher Munro (resigned on
16 July 2024) and Robert Lister.
All of the current directors, excluding
Christopher Munro and Jonathan Gunby
are standing for re-election at the
upcoming AGM.
The appointment and replacement of
directors is governed by the Company’s
Articles of Association, the UK Corporate
Governance Code, the Companies Act 2006
and related legislation. The directors may
exercise all the powers of the Company.
Service contracts and letters
of appointment
All executive directors have written service
contracts in place with an employing
company in the Group. Although the
executive directors’ service contracts do not
have fixed end dates, they may be terminated
with six months’ notice from either side.
In the event that notice is given to terminate
the executive director’s contract, the
Company may make a payment in lieu of
notice or place the individual on garden leave.
Entitlement to any variable remuneration
arrangements will be determined in
accordance with the relevant plan rules and
the Directors’ Remuneration Policy. Executive
directors’ service contracts do not make any
other provision for termination payments.
Non-executive directors do not have service
contracts, but are bound by letters of
appointment which are available for
inspection on request at the Company’s
registered office.
Non-executive directors are appointed for
a three-year term, subject to confirmation by
shareholders at the following annual general
meeting and annual re-election at each
subsequent annual general meeting.
Strategic report
Corporate governance
Financial statements
Other information
95
IntegraFin
Annual Report 2024
Details of non-executive directors’ terms of appointment
Details of the non-executive directors’ terms of appointment are set out below:
Non-executive director
Date of first appointment
Date of latest renewal term
Date for further renewal term
Christopher Munro
1 February 2017
13 February 2023
N/A
Caroline Banszky
22 August 2018
22 August 2024
22 August 2027
Victoria Cochrane
28 September 2018
28 September 2024
28 September 2027
Richard Cranfield
26 June 2019
25 June 2022
25 June 2025
Robert Lister
26 June 2019
26 June 2022
26 June 2025
Rita Dhut
22 September 2021
22 September 2024
22 September 2027
Directors’ interests
Details of the Directors’ interests in the
Company’s Ordinary Shares can be found on
page 92 of the Remuneration Report. During
the financial year, rights for share options
were granted to Alexander Scott,
Jonathan Gunby (resigned 30/09/24) and
Euan Marshall under the Company’s deferred
bonus Share Option Plan.
Throughout the financial year, no director
had any material interest in a contract to
which the Company or any of its subsidiary
undertakings was a party (other than their
own service contract) that requires
disclosure under the requirements of the
Companies Act 2006.
Directors’ indemnities
The Company has made qualifying third
party indemnity provisions for the benefit of
its directors. These provisions were for the
purposes of section 234 of the Companies
Act 2006 and were in force throughout the
financial year and remain so at the date of
this report. In addition, the Company
maintains directors’ and officers’ liability
insurance which gives appropriate cover for
legal action brought against its directors.
Status of Company
The Company is registered as a public limited
Company under the Companies Act 2006.
Stakeholders
The Group considers its principal
stakeholders to be clients and advisers,
employees, regulators, shareholders,
suppliers, and communities. Details on the
Group’s stakeholder engagement is outlined
on pages 14 to 18.
Diversity and inclusion
The Company recognises the benefits of
companies having a diverse board and sees
diversity at board level as important in
maintaining good corporate and board
effectiveness. The Group has an established
board Diversity Policy dealing with
appointments to the board.
The objective of the Group’s board Diversity
Policy is to ensure that new appointments to
any board within the Group are made on
merit, taking into account the different skills,
industry experience, independence,
knowledge and background required to
achieve a balanced and effective board.
The Policy also states that the Company will
only use executive search firms that have
signed up to the Voluntary Code for
Executive Search Firms.
When determining the composition of the
board, consideration is given to the diversity
of board members and, when possible,
appointments are made with a view to
achieving a balance of skills with diversity.
More information on the Group’s approach
to diversity and inclusion is outlined in the
People section on page 27.
Share capital
Structure of the Company’s capital
As at 30 September 2024, the Company’s
issued and fully paid up share capital was
331,322,014 Ordinary Shares of £0.01 each.
The Company does not hold any treasury
shares. The Ordinary Shares have attached
to them equal voting, dividend and capital
distribution rights.
Voting rights
At any General Meeting, on a show of hands,
any member present in person has one vote
and every proxy present, who has been duly
appointed by a member entitled to vote on a
resolution, has one vote. On a poll vote, every
person present in person or by proxy has one
vote for every share held. All shares carry
equal voting rights and there are no
restrictions on voting rights.
Two EBTs operate in connection with the
Group’s deferred bonus Share Option Plan.
The Trustees of the EBTs may exercise all
rights attaching to the shares in accordance
with their fiduciary duties other than as
specifically restricted in the relevant Plan
governing documents. The Trustees of the
EBTs have informed the Company that their
normal policy is to abstain from voting in
respect of the Company’s shares held in
trust. The Trustees of the Company’s two
Share Incentive Plans (SIPs) will vote as
directed by SIP participants in respect of the
allocated shares but the Trustees will not
otherwise vote in respect of the unallocated
shares held in the SIP Trusts.
Restrictions on share transfers
There are restrictions on share transfers,
all of which are set out in the Company’s
Articles. The board may decline to register:
a transfer of uncertificated shares in the
circumstances set out in the Uncertificated
Securities Regulations 2001; a transfer of
certificated shares that are not fully paid;
a transfer to more than four joint holders;
a transfer of certificated shares which is not
in respect of only one class of share; a
transfer which is not accompanied by the
certificate for the shares to which it relates;
a transfer which is not duly stamped and
deposited at the Transfer Office (or such
other place in England and Wales as the
directors may from time to time decide); or
a transfer where in accordance with section
794 of the Companies Act 2006 a notice
(under section 793 of that Act) has been
served by the Company on a shareholder
who has then failed to give the information
required within the specified time.
Purchase of own shares
At the 2024 AGM, shareholders authorised
the Company to buy back up to 10% of its
own Ordinary Shares by market purchase at
any time prior to the conclusion of the AGM
to be held in 2025.
Whilst such authority would only be used if
the board was satisfied that to do so would
be in the interests of shareholders, the board
considers it desirable to have the general
authority in order to maintain compliance
with the regulatory capital requirements or
targets applicable to the Group.
The Company did not purchase any of its
own shares during the financial year.
However, the EBTs purchase the Company’s
shares from time to time as authorised
under the Trust Deeds in respect of awards
granted under the Company’s employee
share schemes.
Directors’ report
continued
Strategic report
Corporate governance
Financial statements
Other information
96
IntegraFin
Annual Report 2024
Substantial shareholders
As at 17 December 2024, the Company had been notified of the following interests in 3% or more of the Company’s issued Ordinary Share
capital disclosed to the Company under Disclosure Guidance and Transparency Rule 5. The information provided below was correct as at the
date of notification. It should be noted that these holdings are likely to have changed since being notified to the Company. However, notification
of any change is not required until the next applicable threshold is crossed.
Shareholder
Nature of holding
Number of
Ordinary Shares at
30 September 2024
% of voting rights at
30 September 2024
Number of
Ordinary Shares at
17 December 2024
% of voting rights at
17 December 2024
Michael Howard
Direct
25,911,753
7.82%
25,911,753
7.82%
Indirect
6,088,247
1.84%
6,088,247
1.84%
BlackRock Inc.
Indirect
31,989,838
9.65%
31,565,494
9.52%
Securities Lending
498,722
0.15%
329,987
0.09%
Contracts for difference
4,220,304
1.27%
4,514,713
1.36%
Liontrust Investment Partners LLP
Direct
16,910,112
5.10%
16,910,112
5.10%
Evenlode Investment Management Ltd
Direct
N/A*
N/A*
16,621,551
5.02%
The percentage provided was correct at the
date of notification.
The interests of the directors, and any persons
closely associated, in the issued share capital
of the Company are shown on page 92.
*
Evenlode Investment Management Ltd provided
the Company with its first disclosure under
Disclosure Guidance and Transparency Rule 5
on 28 November 2024.
Directors’ interests
Except for the shareholding details set out
in the Directors’ Remuneration Report, there
has been no change to the interests of any
of the directors or their persons closely
associated during the financial year.
Dividends
In financial year 2024, the Company paid two
interim dividends. Both dividends were paid
by reference to the Company’s issued and
allotted share capital on the record date.
An interim dividend of 7.0 pence per share –
£23.2 million – was paid on 26 January 2024.
An interim dividend of 3.2 pence per share –
£10.5 million – was paid on 5 July 2024.
An interim dividend of 7.2 pence per share –
£23.9 million – has been declared by the
board and will be paid in January 2025.
The Trustees of the EBTs have each waived
dividends on shares declared in the Company
shares held by those trusts and the Trustees of
the SIP have waived dividends on unallocated
shares in the Company shares held by it.
Employee information
and engagement
The Company has no employees (2023: nil),
but the Group had 666 employees at year
end (2023: 649). The Group continues to
promote a culture whereby employees are
encouraged to develop and to contribute
to the overall aims of the business.
The Company has considered the requirements
of s.172 of the Companies Act on pages 20
and 21, to ensure that the interests of
employees are considered by the board in
discussions and decision making, and the
associated provisions of the 2018 Corporate
Governance Code regarding the method of
engagement with the workforce. Details of
how the Company has engaged with its
employees are outlined on page 57 of the
Governance Report and in the Responsible
Business section on pages 26 and 27.
Significant agreements
and change of control
All the Company’s share plans contain
provisions relating to a change of control. In
the event of a change of control, outstanding
awards and options may be lapsed and
replaced with equivalent awards over shares
in the new Company, subject to the
Remuneration Committee’s discretion.
Engagement with suppliers
The Group monitors its relationships with key
suppliers and relationship meetings are held
with suppliers of critical business services.
The Group monitors its payment
performance with suppliers and further
details are set out in the Stakeholder
Engagement section on page 18.
Articles of Association
The Articles of Association may be amended
by special resolution of the shareholders.
Emissions
For commentary on emissions, please see the
Responsible Business section on pages 30 to 32.
Political donations
The Group does not make political donations.
Employment of disabled people
The Company’s policy regarding
employment, training, career development
and promotion of disabled employees, and
employees who become disabled whilst in
employment, is to make reasonable
adjustments as required.
Post-year-end events
Events after the reporting date are detailed in
note 33. There are no reportable events
(2023: none).
Disclosure of information
to external auditor
Each of the persons who is a director at the
date of approval of this report confirms that:
n
so far as the director is aware, there is no
relevant audit information of which the
Company’s auditor is unaware; and
n
the director has taken all the steps that
they ought to have taken as a director in
order to make themselves aware of any
relevant audit information and to establish
that the Company’s auditor is aware of
that information.
This confirmation is given in accordance
with the provisions of section 418 of the
Companies Act 2006.
Auditor
Resolutions to reappoint EY as external
auditor of the Company and to authorise the
Audit and Risk Committee to determine its
remuneration will be proposed at the AGM to
be held on 27 February 2025.
2025 AGM
The AGM will be held in person at the
Company’s headquarters in London on 27
February 2025. Details of the resolutions to be
proposed at the AGM are set out in the separate
circular which has been sent to all shareholders
and is available on the Company’s website at
www.integrafin.co.uk/shareholder-information/.
By order of the board,
Alexander Scott
Chief Executive Officer
17 December 2024
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Corporate governance
Financial statements
Other information
97
IntegraFin
Annual Report 2024
Statement of directors’ responsibilities
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
United Kingdom law and regulations.
Company law requires the directors to
prepare financial statements for each
financial year. Under that law the directors
have elected to prepare the Group and parent
Company financial statements in accordance
with UK-adopted international accounting
standards (IFRSs). 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 the Company
and of the profit or loss of the Group and
the Company for that period.
In preparing these financial statements the
directors are required to:
n
select suitable accounting policies in
accordance with IAS 8 Accounting
Policies, Changes in Accounting
Estimates and Errors and then apply
them consistently;
n
make judgements and accounting
estimates that are reasonable and prudent;
n
present information, including accounting
policies, in a manner that provides
relevant, reliable, comparable and
understandable information;
n
provide additional disclosures when
compliance with the specific requirements
in IFRSs is insufficient to enable users to
understand the impact of particular
transactions, other events and conditions
on the Group and Company financial
position and financial performance;
n
in respect of the Group financial
statements, state whether UK-adopted
international accounting standards have
been followed, subject to any material
departures disclosed and explained in
the financial statements;
n
in respect of the parent Company
financial statements, state whether
UK-adopted international accounting
standards, have been followed, subject to
any material departures disclosed and
explained in the financial statements; and
n
prepare the financial statements on the
going concern basis unless it is
inappropriate to presume that the
Company and/or the Group will continue
in business.
The Company is responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
and Group’s transactions and disclose with
reasonable accuracy, at any time, the
financial position of the Company and the
Group and enable the directors to ensure
that the Company and the Group financial
statements comply with the Companies
Act 2006. They are also responsible for
safeguarding the assets of the Group and
parent Company and hence for taking
reasonable steps for the prevention and
detection of 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 comply 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.
Directors’ responsibilities
pursuant to DTR4
The directors confirm, to the best of
their knowledge:
n
that the consolidated financial
statements, prepared in accordance with
UK-adopted international accounting
standards give a true and fair view of the
assets, liabilities, financial position and
profit of the parent Company and
undertakings included in the
consolidation taken as a whole;
n
that the Annual Report, including the
Strategic Report, includes a fair review of
the development and performance of the
business and the position of the Company
and undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks
and uncertainties that they face; and
n
that they consider the Annual Report,
taken as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Company’s position,
performance, business model and strategy.
By order of the board,
Helen Wakeford
Company Secretary
17 December 2024
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Financial statements
Other information
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