(% of AUM above benchmark over three years)
2020: £12.3bn outflow
(Figures exclude liquidity and LBG tranche withdrawals)
This was our reset year. In 2021 we set out a clear strategy for how we will create long-term sustainable growth and arrest the decline in revenue. Today I am very pleased to report strong progress for this first year of our three year plan. We are delivering on our strategy for growth.
For the first time since the merger, we have reported an increase in revenue for the full year – as well as an improved cost/income ratio of 79%, and a 47% increase in adjusted operating profit. We remain focused on delivering compound annual revenue growth in the high single figures. This will enable us to exit 2023 with a cost/income ratio of around 70%.
Strategically, we have made huge strides forward. We have simplified and extended the relationship with our largest client, Phoenix. We have successfully rebranded as abrdn which gives us a unified global identity and purpose. We have divested non-core assets and built out our capabilities across our three vectors, including in private markets and digital content. More broadly, we have sharpened the focus of our Investments business to identify the key areas where we have a true competitive advantage. And, late in the year, we announced our proposed acquisition of interactive investor – a transaction that transforms our Personal vector, diversifies group revenues and significantly expands our client reach. As stated when we announced, this acquisition is expected to be double-digit earnings accretive in the first full financial year following completion.
Clearly, markets are volatile right now. Geopolitical risk and inflation are rising and there remains an element of uncertainty about the pace at which different economies are recovering from the impacts of the COVID-19 pandemic. We benefit from a strong capital position enabling us both to continue to invest in the business and return money to shareholders. This balance underpins our ability to create long-term value for shareholders.”
2021 was about defining the five core investment strengths of our business. With a new management structure, we are delivering a more focused organisation around these core strengths. While the Americas and EMEA delivered encouraging performances in 2021, we have more work to do in our largest region, the UK, where we have strong existing franchises. We will drive our client-led growth by investing in what we do well, extending our offering, and continuing to rationalise the business by exiting non-core activities.”
CEO, UK, EMEA and Americas, Investments
In 2021 we have reset our APAC strategy, building on our already strong expertise and heritage in the region. We have strengthened our local teams to ensure we deliver sustainable client outcomes in some of the fastest growing markets globally. We are uniquely positioned to guide both global and local investors to navigate these markets."
CEO, Asia Pacific, Investments
Advisers build their business on the goals of their clients. Our business is built on their ambition. Our vision for the partnerships we develop with advisers is about helping them to become the business they want to be and to deliver more to the clients they want to serve. This vision is based on three things: doing business their way, making things easy and putting our strength to work for them.”
We have real strength in our higher-touch offerings, particularly our financial planning and discretionary investment management businesses. We know many clients are also seeking to invest directly and the proposed acquisition of interactive investor offers our clients the flexibility to manage their own investments. We want our clients to have the best possible experience, while showing them the full value that abrdn can offer throughout their life.”
CEO, Personal Wealth