Good afternoon, welcome to Aberdeen. For everyone who is in the room here with us, thank you very much for traveling up to Manchester, or even down to Manchester, for those who've came from Edinburgh. For everyone joining online, thank you very much for joining us, hopefully you can hear us all very clearly. Today, we are doing a spotlight on personal, very excited to be doing it from the offices of II here in Manchester. When we did the advisor spotlight back in November, many of you said that you would like us to do a deep spotlight on personal, today is the day. I'm Stephen Bird I'm going to talk to you about the strategy of Aberdeen first, where personal fits within the company. Then you're going to hear from Richard Wilson, who runs the personal division. You're going to hear from John Tumilty, who is the COO of the business, and also from Debra Bayard, our CFO for personal. The company today, Aberdeen, is a very different company from the one we inherited just three years ago. We have three businesses that are all set up now in a much better position to be able to grow, and we have a group that has diversified its revenues, its customer reach, and its ability to earn. The ii business transformed the personal business and is indeed the heart and soul of the personal direct investing business. It sits alongside the advisor business, which is the number one advisor platform in the U.K. for IFAs by assets. We have a global investing business that has three distinct areas of investing prowess: fixed income, specialist equities, and alternatives. Our mission as a group is to enable better investment, and when you look at the shape of the group today, we have investment content through our global investing business, and we have platforms and wealth business, which allows us to have direct distribution for that content, but to do so on an open architecture basis, which means that we sit on the same side of the table as our clients. A little bit about ii. When we acquired ii last year, we talked about the things that were so distinctive about it, and today you're going to get a deep dive into those features. It is a very distinctive value proposition, being the leading subscriber business in the U.K. We know when we study behavior, that that is the customer's favorite way of investing. What do we mean by the behavior and by the data? ii has higher balances than our competitors in this space because we operate a flat fee model. When we look at the capabilities, of which you will see today, the technology and the talent within the business who have been busy at work adding the advice model. You're going to see the journey of direct self-service and then assisted through advice, you will see that we are building out a capability that will be capable of being the leading wealth provider in the U.K. I talked at the very beginning about the idea of our group being a group that would be client-led and tech-driven, the combination of ii with Aberdeen allows that high-tech, high-touch capability to come to fruition. The U.K. market, in spite of the current challenges in the market, remains a very attractive market to build a leading wealth provider. The U.K., the sixth largest economy in the world, with a market size of about GBP 4.6 trillion, the direct-to-consumer market being almost GBP 300 billion, of which ii, at the end of last year, had GBP 54 billion, and by the end of Q1, had grown already to GBP 56 billion. We have a large addressable market with a long runway of growth and a favorable regulatory environment that will expand that addressable market through time. The U.K. has got attractive demographics for a wealth business. It is an aging society. Some of the statistics around that, between now and 2050, 25% of the U.K. population will be over 65, and in the next 25 years, the over 85 population will double. What that means is that we are going to witness the largest wealth transfer in the history of the U.K. That's a very attractive market to be building the leading wealth platform. The D2C market also has got many supportive characteristics that will drive its growth. The pension reforms, Pension Freedoms Act, the greater permission of guidance tools, all of which are necessary in order to reduce the advice gap and make people aware that they are under-provisioned for their future. Indeed, on average, U.K. citizens are going to have to find an additional GBP 10,000 each and every year until retirement in order to close that gap. Great businesses see a market need and then configure every single part of their business to fulfill that need. Enabling better investment in the sixth largest economy in the world, with an under-provisioned pension pot, is a compelling place to deploy financial services capital. We are very happy that we invested in ii. In fact, if you take the 2022 last seven months that we reported, the GBP 1.49 billion that we paid for II was 16 times trailing earnings. As you hear today, we have a long runway of growth. Let's get into that story and hear from Richard. Hi, I'm Gabby Logan. This is the ii Family Office. Hi. Hello. Richard Wilson. Delighted for those of you who could join us here today, and for those of you on the phones, welcome. What I'm hoping to be able to do in the next hour and three quarters, or hour and a half, I think we'll have a hard stop at 3:45, is take you through the story so far, and part of that will be I'll do about 20 minutes of basic narrative, and then John will describe both our technology and our delivery capability, and we'll have a lens on the financial pic from Deb. I'm I'm also delighted to be joined in the room by some of the firm's leadership, with whom we've built the firm to date over the last few years, and with whom we're structuring the future of the business. In terms of the story so far, as Stephen said, we were acquired in May 2022, the journey to that point had been heavily skewed towards M&A-driven growth. As John, I think, will describe a bit later on, during that period, we focused very heavily on creating the technology footprint, which we could build from, as well as making sure we had safe passage to provide a reliable, trusted service to our customers. Since then, what's been happening is that on the one hand, we've started our rotation in terms of capability and intent from an organic perspective, you'll see more of that in a little while. Secondly, we have been bringing the direct consumer components of Aberdeen together. I think at the end of August, we unified the leadership of the Personal Vector, since then, we've been going through a fairly targeted process of restructuring of personal to create a business which is both focused and simple to build from in the future. The main date points you will have seen, obviously, you will have seen the announcement of the sale of the discretionary business, which we expect to complete at the end of August. We've been going through a very complex process of restructuring what was a multiple regulated businesses, legal entities into one single frame, which we expect to complete by the end of this year. Again, we can talk about that a little bit later on. This is all about creating a scalable business which serves our customers well, using contemporary technology to provide a personalized outcome which fits whatever your version of simple is. As you would expect in the space that we're in, it's attracting some interest from various incumbents and new players. We can see that we have competition from the usual suspects, our listed friends, as well as the life companies. A more aggressive position being taken by some of the U.S. institutions, Vanguard, being quite successful more recently, and Chase obviously had its acquisition of Nutmeg. This has become a busier space, and the tension is between what we see as the long-term market size, which is substantial, but in the short run, the available consumers on an annual basis is somewhere around 300,000. That creates the significant tension in terms of acquisition retention, 'cause you're fighting over this pool. Where we've come from is from a mass affluent position with a price point, which was quite specifically geared that way. More recently, the players have been increasing their marketing spend. As we rotate through organic position, we will then be starting to step up our investment in marketing and brand, which we'll see more of at the tail end of Q3 and Q4. This is a game which we expect will have very few survivors. In the end, back to Stephen's point, in terms of winner takes most, this marketplace is no different to any other. We're already seeing a few players fall away, and we expect to have our feet square in the fight as this story progresses. In terms of who we are, I mean, it's a very simple story where we've anchored our identity around a subscription service. It provides clarity, it means the wealth belongs to the consumer, and we look for recognition that we're providing a service that's valued. We provide a service which we, by developing and deploying what we think is the right culture and the right service focus, that we can be recommended and valued by our consumers. We have today, more five-star Trustpilot scores than the rest of the industry put together. You don't get that on a Sunday, you get that through years and years and years of focus and moments of truth and delivery and learning. That doesn't buy you any credits for tomorrow. In terms of the intent and recognizing that ultimately you exist to support your customers, and they will support you if you keep doing that, so far, so good. The other thing that you have to have, clearly, in our space is relative scale. You need to be able to develop operating leverage so that you can invest in what will be an endless race for technology experience as we go through the different thresholds of market change. That's something which is very hard in the financial arena if you don't keep things brutally simple. Part of our development is, I think over the last five, six years, we've made six acquisitions, including two banking groups, something like 20 something disposals, in the period end to end, about four or five years, in order to end up with a single proposition, single platform, single team, single structure, so you can execute at scale and protect that operating leverage. We will continue to make sure we stay focused so that we can continue to invest in better services at better price points. What we do for a living is pretty simple. It's just we do quite a lot of it. I think, you'll see later on that we're doing something like 25% of all U.K. share trades now, and some of the metrics are quite compelling. Albeit our market size is not huge compared to the U.S., we do very simple things. We execute and custody standard investments for target market U.K. retail investors. We support the basic wrappers, GIA, SIPP, and ISA, we provide various services around in terms of content and experience to make sure that is easier, faster, and more reliable than the other folks. We have some things we do that others don't. There are very few that support direct market access around the world, which means in practice, we offer something like five times more instruments than the other main platforms. Of course, we support multiple currencies. You can hold dollars in your SIPP or in your cash account, you earn interest on that. The very simple thing, you either do it or you don't. If you don't do it, building it is extraordinarily hard. We've had that under the covers for a very long time. Everything else is around staying up to market and up to speed in terms of experience, which is through our various devices, which John will talk about in a little while. Having content which supports decision-making and journeys which help consumers make those choices as simple as possible to get the right outcomes. The pricing structure, this is obviously the key differentiator between us and the rest of the market. All those folks that charge percentages roughly did so because they could, not because it makes any sense. We charge afford to deliver a service. That provides us with the ability to optimize different service proposals for different types of demographic and then add incremental services to help upsell or premiumize those who want more. We've got a small number of customers who are very active, and we support that with some of our premium services. We've got some customers who are very passive, and through providing regular investing, which is free monthly, you can build long-term wealth with no incremental cost. If you're spending your GBP 10 a month, that's all you spend forever. Similarly, on our very low cost, simple SIPP, for your GBP 12.99, you have a digital experience which can be yours for the rest of your life, and that's all you spend. In terms of certainty, clarity, and making sure that more of the wealth belongs to you. That price point differentiation is substantial, and more and more, it's catching on in the marketplace, and the media is also becoming much more aware of it as a differentiator in service. Particularly in a world now where with the cost of living crisis and inflationary pressures, people are becoming much more cost conscious, and that's becoming a key part of the decision making. In terms of our levers for growth, given we're a subscription business, the core is around customer count and revenue per customer. It's not complicated. Our various levers are how to get more customers. I mean, under the cover, currently we are now somewhere around 3% organic growth. If you ignore The Share Centre and EQi tail, which will run off at some point this year, our job is to expand that to become to mid-single figures, in the near term. We do that through a combination of price shift, brand and marketing investment, and continuous UX investment. Those are in place, as well as, repositioning your talent base to be commercially driven. I'm delighted that, along with Alan Berkowitz, who joined us, at the beginning of the year, we have what I think is developing into what will be the best commercial team in Europe. That, as ability to keep testing and learning and delivering at pace, will be something that's very important. Secondly, we've referred to this before, the ability to cross-sell products and deepen penetration is obviously very important. One of the headlines for us on that has been our SIPP penetration. Today, we are, if I'm allowed to use the data we do, which is Q1, we're 13% penetrated end of Q1, and that's tracking very positively. I think you'll see that with something like 16% organic growth in SIPP, which, in terms of penetration, has two things: number one, the revenue per customer goes up, and number two, the lifetime value impact is substantial because the retention rates are very high. That rotation of the book continues, and our job is to move that as fast as we can. New services, I'm not going to front-run John's presentation later on, but hopefully what you'll see is the roadmap on delivery is in terms of our organic focus is yielding significant progress. Last but not least, I'm delighted with the progress we've made around the collaboration with other parts of Aberdeen. We have, within the family, significant engineering capabilities, which we'll see hitting the street fairly soon, as well as a number of other parts of the business, which we have, we have facets of direct-to-consumer assets, which we're looking very hard at, so we can simplify the overall model, and we might position some of those within the D2C vertical. It's a very simple set of levers. We're acting on all of them simultaneously, and notwithstanding the fact that the marketplace is somewhat mute today, we are making progress relative to market across most fronts. In terms of the why we win, I think we've referred to some of this already. You need to have all these elements in place. Our pricing structure is a strategic advantage. It's no secret that we're under index in brand, so part of our job is gonna address that as we'll increase our investment in brand and marketing over the coming years so that we can put that where it needs to be. Our platform, and I'll defer to John on that for later, but we are... No firm in the world is tech debt-free, but we have no cliff edge in our world, and you only get that through continuous, wise, management of technology, and a culture which is continuously investing in the business. That wasn't referring to you, John, obviously. That's the hard thing is keeping things simple and focused and consumer-dominated, and I'm very proud of the culture that we have collectively, formed over the last few years. It's a purposeful business. People join this business because they believe what we're doing is positive for society, and they work hard to get there. Our job to stay focused on that mission and not be distracted by other things is part of what's got us to where we are, we will stay focused on delivering that going forward. On the organic story, we know that we've had a significant part of our history has been M&A. That shouldn't undermine the fact that our organic engine functions okay. You'll see on the orange banner, the percentage of our overall book, which is organically acquired as opposed to through acquisition. The organic growth has been, and is currently running at around, I think, 15%, Deb? Our job is obviously to try and move that up. Part of as we rotate through the business structure and the rotation of the portfolio moves to be more organic-dominated, that obviously changes the dynamic of the cross-sell and the penetration around other products, and clearly, they're also more digitally enabled. You'll see from our business today that this month, about 45% of organically acquired customers trade on mobile versus like 30% of those who were through acquired businesses. You have also rotation in terms of digital adoption, which progresses at a reasonable pace. A few metrics just in terms of the structure of the pricing model and how that affects behavior. What you see here is the e-evolution of our net new assets, which is probably the most interesting metric, which clearly has some level of volatility as we've gone through market peaks and troughs, but is roughly today ranging between the 5% and 10% NNA percentage level on a continuing basis. Q1 this year, I think the net new assets in Q1 were GBP 0.9 billion, which is in the range, and I can't give you any guidance on anything since then, so I'll bite my lip. Again, that's perfectly right. Most of you guys will have seen this stuff before, and it's meat and potatoes. What's a bit more interesting in terms of Q1 and the track back and track forward is notwithstanding somewhat quieter market conditions. On the right-hand side of the chart, you see this is the Q1 progression in terms of competitive market metrics, and on the left-hand side, kind of the state of play in terms of our structure. A couple of distinct attributes of II, which is driven part largely by the pricing structure, is our average assets per customer is roughly 2.5 times the industry average, and that's driven by the fact that the more assets you have, the frankly, the greater value we are, and that obviously has a read-through in terms of behaviors and vulnerability to things like cost of living, where we're relatively or comparatively less exposed than some. We also, because of the subscription price, there are no free seats in II. You pay your subscription, which means on balance, they're more engaged, they do more. We don't have an endless tail of customers who don't pay anything; usually, you have some self-regulation. You'll see that as an audience, it's a higher quality audience, roughly speaking, one of the metrics is they all trade roughly twice as much as some of our leading peers. I mentioned earlier the SIPP penetration level industry. The average penetration is somewhere between 25% and 30%. We're currently sitting at just around 13; it's tracking. I think you'll see we took 20% of all new SIPPs in the market in Q1. That obviously then leads to a tick-up in terms of the total market share. There is clear structural opportunity there, given that in the U.K., we've got 10 million SIPPs or thereabouts. We have something like 60,000, and you've got a chunk in the D.C. space, a large chunk in the insurance space. We expect to go after that assertively over the next few years. In terms of technology adoption and UX, one of the stats that's interesting, and because it doesn't necessarily lead to any future prediction, but in terms of our mobile trading, in Q1, 27% of all mobile trades in the U.K. were done through ii's on the ii mobile app. That's a substantial shift compared to the previous period. We're seeing in the last year, in terms of balance between who trades on desktop versus mobile, in the last year, that's shifted by eight percentage points towards mobile. In terms of the user experience and expectation and the consumer norm, the U.K. was well behind the U.S. and Asia in terms of the adoption. It's moving, and you really get to different tipping points. The expectations about who's going to win versus lose will be more driven by centering experience around the app. Well, that's the boring bit over. I'm now gonna hand you over to John Tumilty, who's gonna show you something about our actual technology and what we're delivering. John, over to you. Thank you, Richard. Yeah, this is the interesting bit, you have to pay attention, pay attention now. My name is John Tumilty. I'm the COO of Interactive investor. I've been at the company nearly seven years. Most of that time, I was the CTO. I'm still responsible for the technology side, but most of the time I was the CTO. I've been working in IT for over 35 years, almost at the dawn of computing. I was 10 years at Goldman Sachs, working in their equity technology area, and seven years at UBS, as the CTO of the investment bank. The last, you know, period of time, six, seven years, that we've been working, we've had lots and lots of merger and acquisitions to do, lots of book moves. We have a very good kind of machine to do that, and so a lot of our focus was on moving all the customers to the same platform, shutting down all the extraneous systems, and then getting the kind of scale in the business. That was our main focus, but in the background, we've also been doing building our kind of operating platform to be able to achieve two things. First of all, to have a kind of ability to power up, to be able to have a robust and scalable platform. We have one platform that had more than one platform. Everything's on the same platform. The second goal is to have a flexible system, so we can add new services, we can link into new data feeds and provide those to customers. That was the goal that we were kind of trying to execute in the background. We think we're kind of there. you know, we're quite there, but we think we've achieved most of those things. how do we do that? We did that by choosing the best technical partners or very, very accomplished technical partners to provide most of the services for us. In the infrastructure space, we don't own any of our machines anymore. We used to have two data centers. That's not true anymore. We use AWS and CSI to provide our infrastructure, and they can do things like if we want more power on the I-series, we can phone them up, and we can just rent more CPUs. We have scalability that way. In our middle office, we use Salesforce as our CRM. We use Snowflake as our data engineering and storage capacity. We use Morningstar for almost all of our market data needs. Then for our processing platform, we use Figaro, which is now an FNZ product. It used to be owned by a company called FNZ. It provides a trade-in and custody back end for us. We have a long-standing relationship with FNZ, and we feel that that platform gives us the scale that we need. We feel if you look up here, security, automation, scalability, minimal hardware footprint, we think this dotted box has given us that. We feel in a good shape. For customer growth, and transaction growth, we think we're in a good place to support the business for the next 5-10 years. All well and good. The other stuff is differentiating where it counts, so having the ability to provide a good experience to the customers through different channels. We've moved on to using the latest technologies on the front end for the mobile and the website, and focused on building, kind of a micro-serviced API, which allows us to link easily into new data feeds and new services and provide those to the different channels to customers. All of that has also been going on in the background for the last six or seven years. Not particularly easy to do, mainly because of the focus that the company needs to allow you to achieve that. Most tech areas will try and do this, but the company loses focus as opposed to the tech. We think we're getting close to having a kind of state-of-the-art, digital operating platform. We've got the robustness, and we've got the scalability. In terms of new services, we've just started to deliver those now this year. We're just coming to that point. 2023, first part of the year, we delivered a new website, so that's got a kind of modern 2020+, look and feel, UX. That's much more accessible, et cetera, all the things that are necessary for a modern website now. That was delivered in January. That's proven out our front-end technology and our middle-tier technology. Next thing that was delivered was Investor Essentials, which is Investor Essentials and Pension Builder, actually, at the same time. These are new pricing bundles. First pricing bundles, new ones that we've introduced for several years, kind of just proving out our pricing tech and ability to process across different service offerings. It's gonna allow us to bundle services together and kind of get value-added services added to packages as we go. That's to attract customers with lower AUA, so a lower-end offering to kind of introduce almost like a starter pack for people as they build up their investments. The third thing, II Community. We've got a little video, so I don't have to talk, too much through these three little videos, but introduction to ii Community, and I'll tell you where that stands. The ii Community app is a social trading platform that enables users to discuss stocks, compare portfolios, and get inspiration from top investors. It is targeted at the self-directed investor looking for additional transparency and information about what their peers are doing. Using performance data, users get breakdowns of risk, returns, and climate ratings while being able to benchmark against other investors. They can also talk about stocks with their own profiles, feeds, groups, and messaging. Let's take a look around. Users can see an overview of their portfolio and their star rating, which is an assessment of the quality of their portfolio based on repeated competitive returns, a stable upward performance over time, and risks spread over multiple areas. They can also see a snapshot of their winners and losers and can alter the timeframe to check performance over time. Drilling down into more detail, users can see a three month history of their transactions and their split of holdings. In the History and Transactions section, users can view their portfolio performance over time, alternating between one week through to a year-long or year-to-date view. In the Largest Holdings screen, it's also a neat way of showing users their split of holdings at a glance. This is where the real fun starts, as app users can explore several different areas to gain insight into ii Community's top members. For example, they can see overall performance and take a deeper look into their portfolio. This is where the real inspiration can come from. Like with users' own portfolios, they can also take a look at top members' history and transactions, as well as their split of holdings. They can also view their diversification. ... returns, and their climate risk breakdown. Users are able to look into the most held stocks by ii Community's top members, as well as their funds and ETFs. Another aspect of ii Community is the discussion groups. Users can set up their own open or closed groups and invite other members of the community to join and discuss various topics. One really popular group is Roast My Portfolio, where users can comment on other users' portfolios, question certain purchasing decisions, and get insights into why users are trading the way that they are. The final feature that most users love is the weekly report, which shows how their investments did that week in comparison to other community members and the FTSE 100. This is also shareable, and some users use it as a basis for discussions. Interactive investor are currently working through scaling the ii Community proposition so that this becomes available to all ii customers. That's a kind of engagement tool that just come out of pilot, and we're going to make available to all ii customers for free. A few of us have been on the pilot. Very engaging tool. People spend a significant amount of time, doesn't sound that much, but 15 minutes a day on the app. We think it's a key engagement tool, and we're really pleased that we partnered with a firm called Stockrepublic to enable us to do that. That's coming out of pilot soon. Next thing is financial planning leads. Part of working with Aberdeen Group, we've just started to make the connection, I think. As a big D2C kind of do-it-yourself platform, we do get a number of inquiries every year about, "Do you do financial planning?" The answer was always, "No, we don't do financial planning, so go somewhere else." We've just started a little process and initiative to pass those financial planning leads onto our financial planning business in the Personal Vector. It's just a first kind of link-up and integration with the other parts of the Personal Vector. Mobile features. We introduced a new mobile last year. It's we own all of the technology now. As Richard said, it's become very popular. New mobile features are dropping all the time. The most significant recent one was FX trading, so the ability to trade FX and hold FX with and see it within your mobile app. That dropped, we've seen the pickup and usage of that to be quite significant. You know, it seems to be there's more people interested in FX trading if it's on the mobile, which is probably something we expect, but it's been proven. Lots more features planned for the mobile. Those are all of the things so far that we've delivered in 23. There's a couple more things that are coming. The Research Hub is again another engagement tool and there's another little video to explain. Launching soon, the ii Research Hub will be a major engagement tab for our subscribers, with all investment tools available under one umbrella. At the top, the Hero section highlights latest news or analyst research. Next is our award-winning editorial content. Customers can go directly to news articles, browse the news hub, or visit their personalized news feed. The Find an Investment rail uses our customizable inline screener tool, allowing column drag and drop, filtering, plus full-screen options. The expert picks rail brings to our investors impartial ideas, insights, and recommendations. For example, selecting the Super 60 item takes you to our rated list. Below are rails linking to powerful tools for technical analysis and market updates and pricing. Finally, the IPO rail showcases the current new issues and share offerings. It is planned that rail positioning within the page will be intelligent, based on customer preferences and tool interaction habits, plus give users the ability to drag and drop rails. The initial launch of the hub will be followed by new Morningstar equity, fund, and sustainability research features. The first of these features will be an equity research hub built on company evaluations from Morningstar's analysts, who use their proprietary methodology, which is briefly explained here. The top of the page has a rail showing the ratings methodology applied to customers' own portfolios. This is followed by latest research, upgrades, downgrades, a highly rated screener, undervalued, overvalued stocks, plus new ideas via Morningstar's pick lists and analyst market reports. The Morningstar ratings and analyst notes will also be integrated into our instrument pages. After Morningstar research has been added to the hub, three more exciting new features are planned: an interactive fund selector tool, guiding customers based on their knowledge and experience, a dedicated RNS page, and an ii data insights dashboard, which uses our vast array of data to provide a unique view into ii customers' trading and investing habits. ... Again, that's another engagement tool for customers. Providing them good service and a place for them to come and investigate, not just look at how much money they've lost or gained, but not often gained at the moment. How much, rather than just look at their portfolio, it's a place for them to look at things about the market. That's due probably in about end of this month, early August. The next thing, I think, is Portfolio Partner, which is probably the most exciting one that we've got on. It's a cooperation between ourselves and Personal Vector and the Investment Vector to provide a kind of new added value service for our customers. I promise you, this is the last video. If we just play that'd be great. ii is unique in bringing amazing value to customers through the subscription model. The challenge is that ii's been limited to a trading platform. That's great if you know how to invest and what to do, but if you don't, and let's face it, most of us don't, then we haven't really been an option for you. That's meant that we haven't been able to help the many who are basically overweight in cash, whose assets are just being eroded by inflation, and who could afford to take investment risk. We're changing that. We want to democratize investing, to let more people benefit from long-term investment growth and the unique ii fee model, and we're gonna do that by making investing incredibly easy. With our partners at Aberdeen, we're creating a suite of investment portfolios ranging from low risk to high risk. They're designed to achieve the maximum long-term return for the level of risk you want to take and will be managed by real people. We know from our research that people generally hate the idea that a computer is going to manage their money for them. We're going to make 3 flavors: a passive range at a very low price point to compete strongly with Vanguard, a sustainable range, again, at a great price point, as we want to make sustainable investing affordable for everyone. Finally, an unrestricted active range. This will be at a slightly higher price point because of the active component, but we'll make sure that your active fee budget is spent where it's going to get most bang for your buck. Because we don't believe 1 investment manager can do everything, all of our portfolios will be whole of market and unfettered. This isn't a very crowded space, but there are some players. We've taken a look, and to be honest, we don't like any of them. They're either too expensive, restricted to in-house managers only, or their customer experience is just too hard, asking you questions no one can realistically answer. We're gonna take you through a very simple digital conversation. We'll start with your goals, what you're actually planning to achieve, and help you understand how, in the long term, investing could help. We'll check investing's right for you with some simple questions. Finally, we'll help you explore which risk level and investment range is right for you. Once invested, we'll regularly rebalance your portfolio to keep it on track, and you'll always be able to see what's going on with our client portal. Making things easy is actually surprisingly hard. We're going to be testing our prototypes over the summer. To keep things simple, we're going to launch with Wrap first. We think this is gonna be a great opportunity for us, combining the unique ii subscription model and the power of the Aberdeen investment team with a really easy-to-use customer experience. Okay, that's Portfolio Partner. That's probably gonna be trialed in a couple of months, but probably not live for customers until later in the year, early next year. Lots of other interesting secret stuff that you're not allowed to know about is also gonna happen in the rest of the year. You got to watch this space 'cause it's so interesting. Get II accounts, you can see it first and early. I think we just go back to our point. We wanted to have a robust and scalable platform, which we think we've achieved to support growth, and we think now we can add services easily and flexibly to improve the customer experience. We think we're pretty well positioned. That's the fun bit of the presentation over. I have to hand you over to finance. Apologize about that. You can ask any interesting questions at the end if you'd like to. I'm gonna hand over to Debra. Thank you, Debra. Finance is the fun bit. Thank you. Good afternoon, everybody. I'm Debra Bayard. I've been CFO of Interactive investor since February of this year. I've been with II, and before that, TD Direct Investing, for just over 15 years. Today, I'm here to tell you about our financial model, and it's a relatively simple one, with just a handful of key variables and drivers. I will explain these a little more over the next few slides. Within the Aberdeen reporting accounts, you will find our revenues categorized into three categories. We have subscription fees, which is, as you would expect, customers just times average fees. We have trading transaction revenue, and that's split down into two components. We have commissions, which are trade volumes multiplied by average commissions, and FX revenue, which is FX transactions by average margin. We also have treasury income, that's simply cash value multiplied by net yield. As you can see, a relatively simple revenue model. On the cost half of the income statement, recent years of both M&A activity and organic growth have given ii the scale to develop an efficient operating platform and cost base. This has supported ii's adjusted operating margin in 2022 of 53%. You've heard Richard talk about our subscription fee pricing model. This gives us a material degree of predictability and means our revenues are diversified. Subscription fees make up a third of our revenue, that takes us away from the variability of market conditions and the economic environment. Let me put this in context. In 2022, subscription fees alone covered 68% of our operating costs. This chart shows you the diversification of our revenues in recent years. You can see the growth of our core base of subscription fees, plus then the more cyclical nature of our trading and treasury income. This chart shows you the resilience of our revenue model on a revenue per customer basis. The red dotted line shows us the steady growth in our average revenue per customer over the last few years, underpinned by a consistent subscription fee. You can also see that when average trading revenues go up and down with the ebb and flow of the market, treasury income tends to move the other way. This supports the, obviously, the resiliency of our model. Here, the dark dotted line, you can see, shows us the average daily trades per customer. It shows the ups and downs of the market. The overall trade trend line, shown in yellow, shows us that after smoothing out all these peaks and troughs, over times, volumes remain relatively constant. Let's look at each revenue line in turn and what will drive them in the near future. Subscription fees. As we've seen, simply a factor of customers times average fees. Acquisitions and strong organic growth have increased our customer base to just over 400,000 at the end of 2022, Our focus now is on organic growth. Organic customer growth continues to be strong, That's expected to continue. That is those customers that we've directly acquired, rather than through M&A transactions. Our new Essentials price points will attract new to market customers, those starting out with lower value portfolios, Our attrition levels from migrated client books tend to run higher for a couple of years post-migration. The last client migration we had was in 2021, when we migrated clients from The Share Centre and EQi. Across 2023, we expect overall the customer lapse rates of these client segments to reduce, and we expect them to reduce back to sort of more normal levels expected in the wider market of about 5%-7%. All that said, the subdued market in 2023 will impact our new customer levels. Overall, we expect mid-single-digit CAGR in total customer numbers over the next 5 years. Average fees have remained relatively flat over recent years, but with continued growth in our SIPP accounts, as Richard mentioned earlier, we expect to see this increase our average fees over time. Trading transaction revenue is mainly a factor of transaction volumes and average commissions or margins. We saw trading volumes peak at record highs in 2021 during the COVID period. Since then, we have seen a fall back from those highs. There are many reasons for us to be confident about future transactional volumes. Our organically acquired customers, as previously mentioned, continue to grow as a proportion of our customer base. Organic customers tend to trade 50% more than those acquired, those we have acquired through M&A. In 2022, our FX transactions made up about 20%-25% of our daily trading levels. With new functionality recently introduced through our mobile app, we expect this to grow and therefore increase our overall average transactional revenue per trade. Despite the subdued market conditions, our trading market share continues to grow. We ended 22 with a 24% market share. After a quiet few years, our treasury income line has come back to life after recent treasury base rate increases, now at 5%. We expect more rate rises to continue. Client cash levels ended 2022 at GBP 6 billion, which was 11% of total AUA, and 11% total AUA of GBP 54 billion. Six-year end, and as interest rates have risen, we have seen a small drop-off in our cash holdings. We would prudently expect our cash levels to be around 9%-10% of AUA in the near future for modeling purposes. We now expect our net interest earnings margin to be in the region of 180 to 200 basis points for 2023 as a whole. Our client cash is placed out on deposit across various terms and various counterparties, in accordance with our cash rules. There is therefore a lag between the base rate changes and us seeing the full impact come through our net treasury income line. On costs, a combination of M&A and organic growth has brought scale and strong operating leverage. New business can be onboarded at a very low marginal cost. As a percentage of AUA, our costs have reduced from 24 basis points in 2019 to 15 basis points in 2022, which is lower than our closest peers, who have reported 18 and 25 basis points. Our competitors are now making up for a lag in IT investment over recent years, whereas we have consistently invested with regular incremental updates. On a per-customer basis, the right chart here shows the widening jaws of our revenue and cost trend lines, and therefore the growth in our adjusted operating profit. On the next slide, we can see how our cost base has grown with the scale of our business over recent years. We have been successful in delivering several M&A transactions and integrations, as we mentioned earlier. We've done that in a very cost-efficient way. Staff costs make up around 47% of our cost base, and as mentioned, we have a constant rolling program of IT and proposition development. This keeps us up to date or ahead of our peers on tech, with no large buildup over time of tech debt. In 2023, we're increasing investment in our brand and advertising, as Richard referred to earlier. Like all businesses, we face inflationary pressures this year, which will bring some incremental costs this year. The finances of our business show that it's resilient, carefully managed, and has significant growth potential as a result of wider trends in the market, increased product penetration, and continued launch of new service lines. Earlier, Richard spoke about the transformation of the Personal Vector and the work ongoing to restructure the financial planning business. The combination of ii's robust financial model and the restructured financial planning business presents a strengthened opportunity for the Personal Vector to deliver organic growth in an efficient way. Going forward, we expect a combined cost-income ratio for the Vector of sub 60%. Thank you for listening, and I'll hand you back over to Richard. Right. It's 2 minutes to 3 o'clock, so we're just about on schedule. By way of wrap-up, to put things very simply, we have the opportunity, the ambition, the culture, and capability; to be as excited today as we were five, six, seven years ago in terms of where we're going. What you've seen, I think, is some data points which demonstrate delivery across a number of metrics, but excitingly, moving to our next wave of organic development, which not just brings together the power of talent technology, but also capabilities across Aberdeen as we move to the next stage of development of the firm. I hope that's given you some sense of what we're doing and where we are and how we work. For those of you who spent some time in Manchester, I hope that's given you some sense of the reality of our workplace and how we spend our time together. At this juncture, we're gonna switch straight into Q&A, if that's all right, 'cause chariots or whatever private jets or of you guys do at 3:45 P.M. I think the protocol is going to be that in the room, we're gonna weave our way in sort of snakes or ladders, whichever the vernacular is, with a single mic. If you haven't thought of a question earlier, you're kind of in trouble because the mic's gonna, like, pass the parcel. I'll either respond or ask one of my colleagues to step in front of the fast-coming train. If we can begin, if any questions, that would be amazing. Hello. The mic got given to me. It's Andrew Green at Autonomous. Two questions I wanted to explore. Firstly, obviously, the cash margin is going up, but at some point in time, base rates will peak and could, you know, possibly settle down around 3%. Can you give us a sense of the journey? If we go up to, say, 6-6.5%, what will you keep, and where is the cracking point as you go down? I don't think your margin expanded enormously north of 3.5% base rates. If you could give us some sense as to how resilient that is. The second thing is, I just want to explore a little bit about this below 60% cost income ratio. I mean, the cost income ratio is a lot lower than that now. Increased spend on advertising, marketing, and inflation. Where, I mean, how much are those gonna be? Where will the expenses land? On the first point, which is the incalculable world of interest rates, having gone through the most aggressive period of quantitative easing in the history of the world, with rates at a level not seen since before we started Babylonian accounting, to a period of the most aggressive rate rises in history. Picking a normal point today is a curious affair. We're remaining... I gave you a couple. You gave me a couple. I mean, as Debs, as Deb said, we've taken what we think is a reasonably prudent view of guidance for this year. Obviously, the market expects it to tighten further. As well as that, clearly a competitive landscape, which is what it is. I mean, we've increased the rates that we pay six times in the last year, the most recent announced last week, where we pay up to, I think, 3.5% interest rates. You would expect, at some point in the future, the net margin to stabilize at a lower level. That future has got along a lot further away than it was... People expected even a few weeks ago, and the notion of embedded inflation is very hard to unpick today. The best we've got today is the guidance that we provided. It's not in our business to try and undershoot the numbers. At some point in the future, that will stabilize. For us, that'll be as much a question of the competitive position as anything else. The thing, as Deb pointed out, there is a so- relationship between net interest margin and trading behavior, so it's also quite hard to look at. One can put it in isolation without looking at the rest of the model. That was a very unhelpful answer, but it's true. The second question was around cost income. I think when you're looking at cost income, and you said it's a lot lower, you're looking at II. You've got here, II on its own, has got a cost income position, which is running, sub-50. You've got the rest of the Personal Vector, which we're going through significant structural change. The outturn of which will be a costing ratio in the 50s. That's the next staging post for us as we go through the end of this year. Of course, as we go through into 2024 and beyond, we'll be engineering that to bits. Just following up, I mean, how much do you plan to be spending on marketing, in, you know, as you ramp up the marketing? Well, yep. What's the impact of inflation on you? That's two very different questions. On the question of marketing, I mean, looking at our overall cost income, we expect to stay in the guide rails in the fifties, so you can take a signal on marketing appetite at that level. What's important to note is in the first quarter this year, I think our spend on, according to the market metrics that we monitor, our spend on marketing was between a third and a quarter of the direct competition. We'll expect to close that gap, I think is the best that I can say. Clearly, what we'll be doing is monitoring that closer to the time and makes decisions discreetly when we get there, both in terms of brand investment and spend by channel. We can expect that to be a material, but not absurd number. Again, within the guide rails, we expect us to stay in the 50s in terms of composite cost income. Can I go back to... You mentioned you thought incremental customers per year in the market was about 300,000. I'd love to know sort of how that comes about, how you build that up. I suppose, the add on to that is clearly customer numbers is gonna be central to your revenue growth. Those customers you've off-boarded via all your various acquisitions and moved on, are those customers you will go back to, that you think now you've reset your platform, you can go and target them again? Are they sort of almost dead to you, and you have to look to a new cohort every year? that's a great question. there is a few factors here. Number one is, I mean, we've gone through a period in 2021, or 2021 and early 2022, where we had a very inflated level of market activity. Lots of new entrants to investing, following whether you call it a bubble or not, but basically, the overhang of consumer tech, and other types of investments, where lots of folks entered the market. going through the correction in end of Q1 2022, those new entrants have either exited or retrenched. So the total level of market, new to market and switches has come down, so that will oscillate over the cycle. Part of our response to that is we're progressively moving our price point to increase the available audience size, which we can't talk about what we're gonna do there, but if you've got an ii account later this year, you might see something on that, which makes the point at which the consumer's price rational much broader. We'll have a larger target audience to go after. Thirdly, when our part of the ambition is to drill holes in the adjacent market spaces, with a kind of proposition and product as we go after more aggressively, again, the live companies and adjacent services. We've got another few parts of our roadmap, which we again, for later this year, next year, we can't really talk about, which are reasonably newsworthy. Part of it's a larger target audience, which has got a price position, and part of it is new propositions to attack adjacent markets. Given all that, does your target feel quite conservative, what you're talking to as your net new customer growth? Obviously, we would aspire to push through that level. In terms of making promises, I think with the guidance we've given today is sensible. There's a lot of test and learn. The U.K. market is catching up with other markets in the world. Some products that are vanilla things in the U.S., Scandinavia, aren't provided in the U.K. because consumers are not ready for it. Some behaviors which are kind of the everyday behaviors in other markets, the consumer doesn't want to hear yet. The U.K. is catching up in terms of behavior, and part of that for us is then test and learn, where you expect things to happen, but until it actually you can prove it, you're best not to make promises about it. Suffice to say, we're reasonably ambitious and optimistic. This is exhausting. Next. Back it off. Yeah, I'll keep it to two. Richard, can you talk about your technology spend? How you think about spending on technology? You've seen examples where other peers have had cost overruns. What are you doing to make sure that you don't fall into that trap, in terms of what you need to do and what is a luxury or what can be delayed? Yeah. I'm gonna drag John Tumilty into this conversation. He and I have spent the most time together in this business, building it over the last few years. The... I mean, part of the, the simple answer to that, is prudence, is saying no to things. It's about execution. Everything that we have done has been around the ability to deliver what you promise. We're... I mean, it's not by accident that some of the most senior folks in the organization are ex-global CTOs of large organizations who've, whose ability to survive in those environments is the ability to execute. There is no risk-free world, that we operate in. That's, we can't zero that out. What we can do is be robust and stay focused on the business. Part of John, if I can ask you to comment. Part of the process has been, being, I don't want to use the word brutal, but clinically focused on what matters and making the hard choices that implies. John? I mean, there's two parts. There's running the business. The person who says no, the most in this organization is me. Whenever anyone comes up with a new idea, I just say, "No, we're not doing that," because it's got a technology implication, and we don't want to kind of veer off that. We stick rigidly, you know, very rigidly to a known proposition that we know that we can build out effectively, and we don't start verging into adjacent propositions or products until we really know we can make money on it, and it's not gonna bend everything else we do. We do that really well. Secondly, when you re-engineer, as we've done a fair amount of, and other firms have done as well, you know, the way you don't going a little bit off track is okay, right? Because that's expected. What you don't want to do is turn around and say, "Okay, I've just spent GBP 15 million, and I've got to restart it." That's a real problem, the way that we avoid that is we do it incrementally. We understand what the migration path is, then we build and build and build. We have hiccups. Some things aren't as quick as we want, some things haven't quite worked, we don't veer off madly on the wrong path then turn around and say, "Okay, now we've got to re-engineer everything." I mean, that's all well-known, kind of, you know, technology management techniques. We just apply them sensibly. Firms have problems with their technology because of the management of the firm, normally, not because of the technology. I'll say, a thing I always say is, "You get the technology you deserve." If you've got a good platform and it works really well, that's because you deserve it. If it doesn't work, then that's because you deserve that. If you stick to the plan and you're careful, then you can engineer things smoothly, and you get a good result. We execute largely like that. I won't say we haven't made mistakes, I won't say we haven't slipped projects, but we get probably, you know, 80%, 90% of things right, which is important. I think culturally, well, our history has been to treat your investments as if it was your own money. That, in terms of focus and choices, changes your whole perspective on what makes sense. That obviously drives you to managing your risk more sensibly, making incremental change. Also where you need to, having the discipline to do the hard stuff and not compromise on that while you're trying to deliver commercial ambition. Some of the stuff that we did on even kind of, the unique customer identity, is really painful. It requires annoying lots of customers over an extended period as you change all of your IDs, and it's thankless. Once you've done that, your ability to be able to provide accelerated services, family networks, enhanced security, that gives you kind of the platform to win in the future and efficiency. The choice to make that happen is hard and requires a lot of discipline, because there's lots of pressure on you to do other stuff. That, I think, back to the culture of the firm, and the ability to be sensible and occasionally stop letting John say no to everything, which is tough, but occasionally it happens. Yeah, one more question. It's Hubert Lam from Bank of America. One last question. On the SIPPs, it seems like this is a big part of your strategy going forward. You're targeting to almost double your market share in SIPPs. Just wondering, what do you think about the timing around that and how you're going to do it. who you're going to take the share from? Yeah, so we have I mean, our SIPP growth has been running at 15%-20% consistently over the last two, three, four years. I mean, our challenge is how to accelerate that. Because you're faced with significant inertia on the consumer side. A large bed of customers who have their pension or their SIPPs with life companies. Very little price transparency and a very difficult marketing challenge about how you can spend wisely to acquire. Our appetite to spend on marketing is much higher than the channel is deep. Part of the reason for expanding our commercial capability is to be able to attack that harder. Given that we're under index, I mean, our penetration increases by about 2% a year almost like clockwork. We have a very good SIPP proposition, a very good digitized service, and we'll be making further moves in terms of proposition and price later this year to make that even more compelling. That's not the challenge. The challenge is to crack open the inertia side, which is how do you open the taps wider on the consumers to move them from where they are? We're very confident about that being a significant runway. The question is how fast you can fly the jet, to abuse that metaphor slightly. Hi, it's Haley Tam from UBS. I'll take two questions as well, please. The first one, just to follow up on that SIPP point. We've talked about the counter cyclicality of the treasury and the trading revenue, and we've talked about how the SIPP margin will be positive for the subscription fee per customer. Is there any reason why I shouldn't interpret your mid-single-digit customer growth guidance as a higher revenue growth target? Gosh! That's good math. I think we've given the guidance we think is sensible. I mean, SIPP is,I'm gonna sidestep this question, I think. SIPP is less cyclical than other parts of the business. Cash levels are higher in SIPPs than they are in other parts, in other wrappers. The asset level in the SIPP is much higher than in other products. It is usually, for most people, the largest single financial asset. The level of engagement for someone who has a SIPP is roughly twice that of those who don't. Those who have a SIPP of 5 to 1,000 versus 100,000, trade twice as much as each other. The lifetime value of a SIPP is somewhere over 10,000, which is roughly 5 times the other wrappers. The retention rate on SIPPs is something like 98%-99%. All those things would lead you to some levels of conclusions. The question is the clock speed over what time that actually takes place. 'Cause whilst we're taking, for example, 20% of all new SIPPs in the market in Q1, in absolute numbers, that doesn't move the dial. It's a slow burn. Part of our challenge is to move the dial faster. Thank you. Then probably another question to sidestep, but if I think about the mid-single digit growth in customer numbers, do you have any preference or targets over how much of that comes from, say, the essentials product? How much comes from new financial planning clients? How should we think about the mix of those new clients? We would expect the core of that to be coming to our core proposition. We're sort of agnostic because currently we have the mix, which is that central core is by far the largest part of the audience. Our premium package has something like 10,000 consumers in it. Our Pension Essentials is somewhere around 10,000, and we've got something like 300,000, or a bit more in that core. That will be the expectation. We've only just, to John's point earlier, we've only just got into the phase of the optimizing and putting pressure on the bundling structure to be able to premiumize and to start to optimize which packages make most sense. That engineering is a recent completion. We saw, I mean, that went live with the Pension Builder in Pension Essentials in the beginning of this year. We'd expect that to pay dividends metaphorically over the next few years as we take full advantage of the engineering that gives us, 'cause I can give you a service proposal, optimizes it for you as opposed to for any other use case. ... Hi, it's Greg Simpson from BNP Paribas Exane. Hey. Two questions maybe. The first is, could you talk about what behavioral changes you're seeing or might expect to see if base rates settle at, like, a structurally higher level than they were in the past? What gives you confidence that cash stays at 9%-10% in your target, and people don't use more money market funds or shift money into gilts or do annuities come back? Just a bit of color there would be interesting. Part of that, obviously, is imponderable. Clearly, we're seeing significant rotation now into fixed income, money market, and more recently, gilts. Anyone who's here who's not bought a gilt, you should go and do one. Although the prices might keep moving. I mean, to back to our wrappers, we have 3 wrappers: SIPP, ISA, and GIA. We're clearly in very unusual times, but historically, the cash levels in those ISAs, I think, as Deb mentioned, it oscillates between 9% and 11% in aggregate over the cycle, but it's quite different within the different wrappers. The SIPP is a much higher cash balance, and then you've got the ISA, and then you've got the GIA, which is lower. Of course, a lot of people will hold cash in the SIPP for very sensible reasons, whether it be for liquidity or otherwise. We'll expect some level of swapping into fixed income and money market. Of course, we promote that. It's all about consumer outcomes, but at the same time, with our consistent SIPP growth, when our average SIPP inbound account is GBP 200,000, I think it is the average inbound value, with cash balances around 15% of the SIPP. If you're tracking in terms of growth, those balances build over time, part of our advantage is that we, because we're under index, that SIPP journey's got quite a wide runway. Within cycle, you'd expect to have cash balances coming down towards a lower level, and as you go through the cycles, they average out. I mean, beyond that, everything else becomes speculation. In terms of the subscription model, more generally, I mean, other subscription models, like a Netflix, do put up pricing from time to time. It seems like you're adding quite a lot of functionality in terms of the community features, the research. Is, you know, could the GBP 9.99 become GBP 10.99? Is that, like, a lever you could, you'd envision pulling in the medium term? That's a really good question. It would be wrong for me to comment specifically, but obviously, periodically, you would expect the price position to be reviewed. We haven't moved the core subscription price since 2019. We went to GBP 9.99. It was 2019? It was 2019. April 2019. Okay. It had a lot. Periodically, you'd expect to have a look at that balance, and clearly, given where we are in our journey, you'd expect the balance to continually optimize towards subscription and away progressively from commission. As you go through the evolution of both optimizing for discrete consumer groups, you would then look to optimize subscription. The answer is the obvious one. Thank you. Thanks. It's Oliver Carruthers from Goldman Sachs. Maybe just to push on that question a little bit. Yeah. On the monthly subscription pricing. You know, how elastic do you think your customers are to this? Maybe, you know, what have you learned since launching the Investor Essentials GBP 4.99 package in January this year about that elasticity? Then a second question on the bundling pricing model. You know, are you seeing Given your investor, your clients are trading less, are you seeing any switching from the more expensive, low trading pack or high trading package to the cheaper headline, but, you know, more expensive to trade package? I guess there's several parts to that answer. One, obviously, there's a longitudinal part of that, which is we're only a few months into that experience. We, to the basic question in terms of elasticity, the answer is there isn't much. The question is in terms of retention versus acquisition, which is a different question. In terms of tolerance for price shift, our experience historically, and it's experience of other platforms, is the consumer is less I'll say insensitive, but relatively insensitive. Occasionally, someone will screw it up. I think Netflix had its own version of that story, about 10 years ago, where they took a bath. There are clearly limits to that model, but relatively inelastic is the question. We haven't touched the boundaries on that, the answer would change if we did. That's answer one, answer two is we're going through the process of now optimizing, introducing different bundle points, which we'll see coming out at the end of this year. It's at that point that we'll expect to have completed what our price structure is, 'cause we've got a couple of components that are missing currently, which we'll talk about when we announce later on, but those will hopefully inform some of those choices. The key difference here today is between lower asset levels and higher asset levels. We've got a GBP 4.99 level for GI and ISA. That intended to attract a certain type of audience. You can, for them, they've got access to all the free, regular investing solutions and so forth, but it's an, it's an AUA cap, so it's not a, it's not a choice. If you exceed the cap, you'll get bumped up. For those who are on higher levels, so maybe they can only trade down, if they fall through the cap, the only real choice you've got is between the premium package and the lower package, and that, today, it oscillates up and down with a very small range. I think our opportunity is to upsell more rather than the other way around, so we haven't been as good as that as we should have been. Got it. Thanks. Hi, thank you. It's Enrico Bolzoni, JP Morgan. Hi. First question, again, going back to conversation about NII and margins. Can you remind us, your 60% below 60% cost income target is based upon what assumption in terms of rates level, margins on cash and over what period of time? Maybe I'll stop here for the first one. Well, there's two parts to that. In terms, you go over the longer part of the cycle, again, you can't take the revenue components in isolation. That doesn't make any sense. If you increase your subscription as part of your revenue, and you oscillate between trade and commission and interest rates, it's, forgive me, it's a mug's game to take interest rates separately and then drill that to pieces. The reality is that the world of zero interest rates is gone, and we're going back to a world where rates exist, and you can project that that will be forever. Our modeling was based upon 160, 170. And what we've seen is that the actual, as the, as the revised guidance is given, we've nudged up the net margin% and nudged down currently the cash level, which gives you the same result. I think originally we were at 6%, at 160, 70, and now we're 180, 200 at 5.7%, 75%. I mean, what I was keen to understand is, I appreciate you have the mid-single digit customer growth number now, you have maybe some assumption on trading activity. I presume that these are baked into the 60%. I was wondering whether, if I look at two years down the line, if whether you're still assuming rates above 2% to hit that 60% or actually it's not? I think, I mean, over the cycle, you'd expect to have some level of regression on the rates curve, but I can't. It's just, given where the world's come from and going to, I mean, you guys can, are just as qualified to make predictions on the market. Everyone got those numbers massively wrong. Every single digit, around the inflation level, the rates level, all the economists were well over their skis on that. I mean, I'm, I can't. I mean, I'm not going to do a better job than they do. My second question is on the attrition level after acquisition, that you say is usually a bit high for quite some time. Considering that you do have a very good proposition, it's very cheap as well, why are they leaving? Can you give some color on who are the people that are leaving, why they're doing so? Are you losing them to competitors or anything else? Related to that, can you tell us, at this point in time, roughly, how many clients have you identified that are at risk of attrition over the next 12 months? In terms of the reasons why customers leave, the. You'll have the generic reasons of price rationality versus leaving the market, versus not providing the service. If I become wealthy and retired, and we don't provide a discretionary or advice service, they will call and say, "Do you do advice?" We say, "No," and they go. That's kind of the generic reasons. Specifically on the acquired business side, we buy the entire business, whether it's price rational for the consumer or not. When we model those transactions, for some of those consumers, it's not price rational that they stay. If you've just got low-value equity custody, there's a couple of folks out there that are much cheaper than we are. We provide everyone with a price guarantee. We try to engage them, but when we test the behavior afterwards about who's leaving, they're leaving because it's price rational for them not to stay with us, which means that they're, generally speaking, much lower-value customers who are doing single stock custody. That's kind of the generalization. That was the answer to that question. I think I've answered all the questions by taking those two, haven't I? I just was keen to know, if possible, if you have an idea how many clients are currently in potentially in a position to leave the platform because of attrition? I can give you know, our overall Our attrition rate is somewhere hovering around 6%, that's, I mean, that's where we are. As you penetrate further on SIPP, which has a 98%-99% retention rate, that tightens the jaws on that number. You're always gonna have those, if you have a pension and you die, you're leaving. and if you leaving life for other reasons, you're leaving. You're always gonna have some level of turnover. It just, it drifts up. I mean, my target number is 95% retention, beyond which it becomes exponentially complicated. It is what it is. Thanks. We've got questions on the phone? Yeah, we go to the line. Yeah. Switching to Norway. We currently have one question on the phone. Our first question comes from Ben Williams from Shore Capital. Ben, your line is now open. Please go ahead. Good afternoon, all. Hey, just a couple of small ones. That mid-single digit CAGR in customer numbers, what sort of market share do you think that gets you to in, say, five years' time? That was question number one. Then, I think sort of a bigger one is, you know, with the new product which sort of, you know, which prompts investment and prompts thinking about your asset class mix, et cetera, how far towards advice do you think you can go? What do you think that will mean in terms of the share of your existing customers' wealth that ends up on the platform, please? Gosh, hi, Ben. That, they're great questions. On the first point, which was, remind me again to start the sentence? just thinking about what that mid-single digit customer- Yeah Number growth means. Yeah In terms of market share, because you obviously thought about it in that respect. Yeah, what, I mean, what we expect to see, in terms of market share, and it depends on the kind of the cycle, but we'll be increasing market share on an annual basis between 0.5% and 2%, depending. Right. Now, there will be, that's organically from time to time. The, the challenge today is there are no good targets from time to time, and there'll be an inorganic activity, 'cause that's the nature of the beast, in which case, those numbers would move by more. Thanks. Ben, the second point? Sorry, 'cause I'm getting jaded. No, I think, yeah, no, I'm not surprised. I mean, you're lucky you didn't do an IPO. It would have been even worse. Look, I was thinking that you deserve a laugh after your hard work. No, I was just thinking about, you know, how your, if you like, the provision of your platform is, yeah, has effectively an advice component coming. Yeah that works for the investor. Obviously investors, you know, in many cases you have part of their wealth on your platform, and they're paying you. Yep ... a subscription at Yep certain level, but actually, over time, you might have a bigger relationship. How do you think that plays out? I mean, that's another good question, part of which we'll be trialing over time. The current facts are that we have a financial planning business, provides advice. We have a significant population in ii who want advice, which we'll use at lead generation into that business. In terms of the assets on platform, partly by, well, by virtue, largely to our pricing structure, we've got a higher% of assets which are wholly on platform than other platforms do. If you look at the- Okay ... investment trends research, we're somewhere approaching 70% in aggregate. 70% of customers' assets are all with us. Of course, the higher the value of the customer, the more likely it is they have assets elsewhere. We'd always assumed in the past that that was, like, 50/50. In fact, our discovery was that the balance is higher with us. How that evolves over time with the planning, we'll have to work through, 'cause certainly there will be planning advice that we will give where we don't service some of those assets. I think that will also always be the case. You're not trying to capture the whole arena. Over time, you'd expect, at the margin, that percentage to increase. We're already at the high watermark in that area. Thank you. Thanks, Ben. Next question. I'm invigorated now. Let's go. Great. It's Bruce Hamilton, CVC. first on competition. Vanguard obviously going after SIPP balances aggressively this year as well. How do you think about your sort of offering versus theirs? I mean, maybe both, you can both grow because it's coming off insurance, but how do you think about that? If Robinhood come to the U.K. at the end of the year, which they're saying they're gonna do, although they reversed that last time around, how much of a competitive threat is that, or is it not really a worry for you? Second question, just on sort of AI use cases, I mean, can that significantly help efficiency? Is there any sort of opportunity around sort of revenue enhancement, or is that sort of overstated hype, in your view? On the first question, if you look at the stats from Q4 to Q1 in terms of net asset flows, I think Vanguard and ii took 30% of the market each. Then the rest of the pie was either net negative or flat, AJ Bell was up. In terms of who's fighting over that space, it's quite clear who we're looking to and who they're looking at to be the protagonist. I think Vanguard's net assets, of their net assets, 40% was SIPP driven. We already, I mean, we're already cheaper than Vanguard for Vanguard's own product, above GBP 100,000. So there's a price point component on that, which we'll be looking at again, fairly soon. The other thing about Vanguard compared to us is that they're closed architecture. They only, their content is Vanguard only, and we're open architecture, whole of market. The way they've stolen the march, quite clearly, and it's full congrats to them. In terms of brand and marketing, they've done a good job, and this proposition is nice and simple. There's a couple of lessons on that we'll be responding to, as aggressively or assertively as we know how in the months ahead. In terms of the Robinhood, the same thing applied to the Freetrade argument. Robinhood, as you know, their revenue stream was largely PFOF driven and stock loan. PFOF is a bust in the U.K. It just doesn't work. Stock loans have got very low appetite along the U.K. consumer. We've got all the pipes and capability to do that. We've chosen not to, 'cause it's just not there. Their financial model doesn't work. Even if it did, I mean, the Robinhood's journey is no different to for me than the free trades of the world. There is no free trade, and the question for us is the deepening of a proposition where you're providing a long-term investment capability, which happens to be that our platform is very fast and reliable. You can hit markets around the world, that's because it can do F1 if you need to. Its core purpose is to serve the needs of a large range of investors. That's not the same proposition as those guys. I've always had the, every year, there's been whatever board saying, "Oh, my God! Oh, my God! What are we gonna do about the latest thing on Freetrade? Oh, my God. Oh, my God." Some platforms have responded to that by creating a new proposition to try and compete directly. Not sure that's very wise. The job is to stay absolutely brutally focused on what you do, and win through content, service, and picking the value points that can serve the consumer. Is that the. Yeah. Sorry, there's one on AI as well. Oh, AI. I might stitch John with this, but we've been Until recently, AI's been of some value, but hasn't really been in a place to move the dial. We use machine learning and k-means clustering to construct our consumer segments. We use machine learning, have used neural networks in terms of creating predictive models around performance marketing spend versus versus market volatility. We've used predictor or prescriptive modeling to drive some experiences through the website, so it knows what your profile is and adjusts your experience according to how you use it. That's co-created some level of incremental advantage, which is being driven by lots of test and learn. Hasn't really been a game changer. What you see with LLM and the large language models, is potentially a very substantial shift. We see that both on the cost side, efficiency, and service side, and on the proposition side. John Allen and the teams are working potentially on test and learn in that space currently. The opportunities are material, and those who don't exploit those will lose. It's the first real shift I think we've seen of recently, where, as an aggressor capability, that technology is a dial mover. John, do you wanna comment? We're just starting to look at it properly. You know, we have a very good kind of data engineering and data science team. AI is obviously a little bit different from that, so we've just started to take a look at it. A lot of the kind of industrial applications for it aren't available just yet because of, you know, because of the licensing, et cetera. We are gonna do two learns on it. One of the most important things, which is sort of understood, is, it's only AI if you get your data classification right. Doesn't just go off and do what you think it's gonna do. You actually have to classify your data, and you actually have to train it on your data. We have started looking at that, at how we would classify our own internal data. We believe there's two or three ways that AI could impact us. Firstly is, we can use it to service the customers better. You know, kind of much more intelligent chatbot than you get available yet. I would expect most companies, but certainly the bigger ones, to come up with much more intelligent customer service because of an AI application. We're looking at some of that. That's revenue saving and improved customer services. The second thing would be a bit scarier, is to let it run on your own stuff and just say, "Tell us something about our business." You know, if you could do that, you could... I'm not sure, you know, people's understandings are different, but certainly you could set it more generic questions, you know, than are perhaps available now, and see what it comes up with. The third thing, which, of course, you wouldn't possibly wanna do, you could write analyst reports, and that's what's up. We don't wanna go anywhere near that, do we? We'll stop that. I've already even mentioned that. I think the first opportunity is really on the customer services side. That's where I would see our first application for it, and we would target that. That wouldn't be revenue enhancement. It would be service improvement and cost saving. Thanks, John. We've got four minutes left before the Chinook arrives. Could we just, Ben, we've got four minutes left in terms of questions, now is the time. Yeah. David McCann from Deutsche Numis side. Did have a couple of. Maybe we can go through them quickly then. I mean, you talked a lot about wanting to grow more in SIPPs, but, I mean, you know, SIPPs have been a mainstream product since at least 2006. Maybe just help us understand why you kind of under-indexed in SIPPs to date. What has it been that's, I guess, stopped you getting there so far? That's question one. Yeah, question two, you know, the scalability of the platform, what kind of growth and new customer take on customer numbers as it's under administration? You know, does the tech you already have in place? You know, I presume it can deal with the 5%, sort of, new customer growth, but, you know, thinking more optimistically, what can it do from what you've already got? Finally, just on the Portfolio Partner product, is this gonna be something you're gonna charge extra for potentially? I assume this is an optional service, so customers who like it the way they've already got it won't have to adopt this, but it's potentially something they can do. I guess to that end, you know, are you targeting growth there to come from new to group customers, or do you expect to penetrate the existing ones as well? Thank you. On, on the first question, I mean, we're taking today about 20% of all new SIPPs in the market, so from an acquisition standpoint, it's tracking, but the tech challenge is how do you do more? The question, why are we under indexed, which is the start of the journey, that's largely a function of a history of the firm where all the firms that we acquired, only one really had an embedded SIPPs business, which was ATS. The others were outsourced models of facilitation. They didn't really have the capability. So the start point, you start a long way further back. TD had a service that actually was outsourced to AJ Bell at the time, so it was a white label. EQi is again, ran through third-party administrators. The Share Center ran through Curtis Banks and had almost none. You're starting with a, they were nature of the cohorts of customers that we acquired back then. That's provided us with, obviously, an opportunity which is cross-selling to that consumer base, and we've a reasonable share of our SIPP growth comes from cross-selling to that legacy base. The largest base comes from organically acquired customers, and cross-selling to them in the first 18 months of their life with the firm. That's where the history came from. I love it when there's, like, 40 questions. The second question was what again? On the scalability. Scalability. Yeah. I mean, I'll go with John on this. I mean, this, just the high, the highball answer is, as John said, we think our platform is good structurally for the next 5, 10 years. There's things that we can do because it's all virtualized, you can dial up. Whether that, in practical terms, that's 4x or 10x tomorrow, the reality is that you can only scale. Your job to be, is to be fit for purpose for a visible horizon. No one, and I think a number of us have been through large-scale businesses before. The business I was in with Alain, we went from 130,000 trades a day to 2 million a day. You can't tell at what point in that process that some things will creak. The job is to be responsive to that and to deal with them. Relative to the known knowns, we scale substantially. If we go 10x in the next three years, you'd expect some stuff to be a problem. Where it's a problem is usually quite specific. On market open, when everyone connects simultaneously for the trade, there's a point in terms of kind of the stress on the platform, where you'd expect to have a weak link, as opposed to processing overnight, which is kind of not the same. John, I don't know if you want to add more to that, but. Yeah, I thought it's about right. I think that the old sort of tech rule of thumb is twice your previous peak would be your where you need to be at any given point of time. That's what we've got. Our previous peak was sort of 45,000 trades throughout the day. We think we're scaled now, and we could cope with, like, 90,000, 100,000. That would be. You know, currently, we're on 20 or 16, but we think we've got plenty of capacity to, you know, we, I, you know, I can't. Probably can't say the numbers exactly what I said, but we think we've got plenty of capacity for the growth that's planned for the next five years. You know, the things that are break are the things that you don't think of actually. Exactly. You know, it sounds obvious, but we think that, we think it's well designed and componentized, so we can react quickly to stresses in the system. For instance, we cope with it, but there was a One of the market peaks was international trading, was the thing that caused us the most problem during the US Open, during the US Open, which we had never experienced before. We had to react to that pretty quickly because it was a major kind of fault in the platform for a day or so, until we managed to get more resources online. But we think we're componentized, so we think we can cope. Twice the previous peak is where we're aimed at, and we're currently at okay with that. On the last question, if I can introduce Alain, a brand performance partner, a portfolio partner. Alain Courbebaisse. Last question was, sorry? On the Portfolio Partner, presumably this is optional. Is it gonna be something you're gonna charge for? Are you targeting, you know, the penetration comes from, I guess, new clients to group or what? Yes ... existing clients? Our approach to understand well is to be more than ever, a subscription business. We are currently reviewing and preparing a set of bundle, of which we'll make available certain features for the price on a flat fee manner. We don't expect to have it as a add-on fee for any kind of bundle, but you may have to subscribe to a certain bundle for you. To complement your question about why it's so important for us, the Portfolio Partner, is that it's opening to us the world of all the people that want help to do something or that want us to do it for them. While today, our core proposition is just people that want to do it themselves. It's a huge opportunity for us, and we'll work on the pricing and the bundle structure that will provide value, as we always did for our customer there. Well, I think in terms of how we view this ourselves, is we view this as a product, as a category-killing product. Yeah ... at a price point which goes with it. We'll, we can talk about more of that later in the year, it will be, as a proposition, it will be a dial mover in terms of content and price. Interestingly, we've looked at doing something like this for several years, we've always stopped short of it, because we didn't have not the technical expertise, but the kind of business knowledge to do it. It was only by utilizing Aberdeen's experience in this that we managed to execute it. Technically, we could have done it before. We didn't do it because we didn't have the business expertise or the portfolio, management of portfolios to do it. That's been a key thing. That was one of the first things we got moving, was this, because we always knew that it was a good proposition. The value of each portfolio is beating the best in this category to date so far, on what we might also we think it will be of a very good value for our customers. Thanks, Alain. It's 3:50, I think we're gonna have to drop the curtain. Thank you very much for coming to Manchester. Thank you so much for all the great questions, apart from one, all the great questions. I hope that's been useful, you get a sense of what we're about, what we're doing, and who we are. Look forward to writing all your amazing analyst notes, which were done via ChatGPT tomorrow. Thank you very much. Safe journey.