WMA Annual Report 2014

ANNUAL REPORT 2013/2014

About WMA

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he Wealth Management Association (WMA) is a trade association that represents 184 firms and prides itself on working for the private client investment community.

Of this number 108 members are wealth management and stockbroking firms that deal directly for the private investor, the remaining 76 are associate members who provide professional services to our member firms. If you buy or sell securities at any time, you are likely to deal with a firm that is a member of the WMA. Our Members Today WMA members reach over 4 million investors, manage £650 billion of the country’s wealth, carry out over 20 million trades a year and operate in over 580 branches across the UK, Ireland, the Channel Islands and the Isle of Man. WMA Objectives • to ensure that the interests of our members are appropriately voiced and represented • to provide information and assistance to our members across a wide range of change encompassing regulatory, market and business issues • to communicate industry change to our members • to liaise with governments, regulators, financial institutions and all participants in financial services • to lead the debate in Europe on retail investment work and the overall development of the European securities industry WMA Relationships WMA has good working relationships with: • Auditing Practices Board • Chartered Institute for Securities & Investment (CISI) • Euroclear UK & Ireland (EUI, ‘Crest’) • European Banking Authority (EBA) • European Commission • European Parliament • European Securities & Markets Authority (ESMA) • Financial Ombudsman Service (FOS) • Financial Reporting Council (FRC) • Financial Services Authority/Financial Conduct Authority (FSA/FCA) • Financial Services Compensation Scheme (FSCS) • FTSE • Guernsey Financial Services Commission • HM Treasury (HMT) • HM Revenue & Customs (HMRC) • Isle of Man Financial Supervision Commission • Jersey Financial Services Commission • Joint Money Laundering Steering Group (JMLSG) • London Stock Exchange (LSE) • London Clearing House (LCH) • Office of Fair Trading (OFT) • The Takeover Panel • Various other UK & European trade associations

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THE WMA TEAM

Dr Tim May Chief Executive

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John Barrass Deputy Chief Executive

Ian Cornwall Director of Regulation

Andy Thompson Director of Operations

Jason Baxter Director of Investment and Membership

Sheena Gillett Head of Communications and PR

Michelle Read Finance and Business Services Manager

Pauline Young PA to Chief Executive & Company Secretary

Amanda Wall Team Secretary

Emma Clarke Committee Co-ordinator

Shennelle Morant Policy Advisor

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The more time I spend with the WMA, the more I realise the immensely important and vital role member firms play in the economy as a whole

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CHAIRMAN’S REPORT

Chairman’s Report Tim Ingram Chairman

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s a relative newcomer to the wealth management sector (but not to the financial services industry), the more time I spend with the WMA, the more I realise the immensely important and vital role member firms play in the economy as a whole. The ethos of member firms is the responsible and effective management and administration of the long term savings of individuals. As I mentioned last year, given the world we now live in – not least with increasing longevity – this responsible stewardship is more important than ever.

Unlike the fund management industry, at the heart of a wealth manager’s business is the long term client relationship with the individual investor; this is true whether the relationship is full discretionary management, advisory or execution only. What is perhaps not always fully appreciated by the outside world – and at times I fear this may include Regulators – is that the successful business model of a wealth manager requires that stewardship to be responsible and fair. (i) Objectives Last year I wrote about how important it is for us and our members to understand and agree what WMA are trying to achieve. Our objectives are spelt out on our website and elsewhere in the Annual Report. I would particularly like to address two of these: (a) Interaction with the EU Primary new legislation, regulation and directives to control how and what financial services are allowed to be provided – particularly to individuals – now emanate essentially from Brussels. As has been widely reported in the media, the extent and severity of these new controls has been steadily increasing since the financial crisis. Whether consumers are actually benefiting from this

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is a moot point. What is very clear is that all of this adds substantially to costs, and in the end the consumer has to pay: there is no one else to foot the bill. A vital role of the WMA is to engage and interact with all the key people in the EU Commission, the EU Parliament and the Council of Ministers to help steer all relevant potential new measures in a way that still enables the UK wealth management sector to operate in an effective manner for its clients. There simply is no other body performing this essential task in a comprehensive way for the private investor community and the firms that directly manage their investments – not any part of the UK Government nor any trade body.

It is no exaggeration to state that if it were not for the efforts of the WMA, new measures from the EU would have been enacted that could have prevented major areas of the UK wealth management industry from operating!

In terms of new regulation, what happens is news: what doesn’t is not. Much of the work of the WMA is therefore unreported. (b) The UK Regulator With the creation of the FCA, all full members of the WMA are now regulated by that body.

A second vital role of the WMA is therefore to engage and interact with the appropriate parts of the FCA on behalf of the wealth management industry as a whole.

This includes conveying and explaining the industry views and concerns on key aspects to the FCA, and ensuring that the FCA’s own position and concerns are properly communicated to the WMA membership.

Again there is no other body comprehensively performing this vital task for the wealth management sector. (ii) Membership of the WMA At the time of writing there are 108 full members of the WMA. Although this covers about £650bn of consumer assets beneficially owned by about 4 million individual investors, it does not completely encompass the entirety of the UK wealth management industry. Going forward, we will continue actively to encourage new members to join in order to enhance further the effectiveness of the Association in promoting the interests of the wealth management industry and its clients. I believe the WMA is

run efficiently and cost effectively, particularly considering the scope of its activities, but nonetheless it costs us nearly £2 million p.a. to operate. In an industry where treating people fairly is so important, I would question whether it is fair for those wealth managers who are not members of the Association (and therefore not paying membership fees) to be automatically benefiting from the actions the WMA exercises on behalf of the industry. (iii) Accounts The Association started the year with Capital and Reserves totalling £1,863,000 and cash and liquid investments totalling over £1.9m.

As mentioned last year, the board wished cautiously to use a small part of the Reserves to enhance the overall effectiveness of the Association. In the end, the loss for the year was slightly higher, totalling about £180,000.

Some of this was caused by the one-off costs of both changing the name (and image) of the Association from APCIMS to the Wealth Management Association and recruiting a new CEO. Despite this loss, the Association’s financial position continues to be healthy with, at the end of the financial year, capital and reserves of about £1,682,000.

Nonetheless it is the longer term aim to bring WMA back to a break-even position. (iv) Management I would like to thank all members of the board and the committees and Tim May and all his staff for their hard work and efforts throughout the year. As we announced, Tim May, earlier this year informed us that he would wish to step down in the autumn.

We will all be very sad to see him depart in October. As we also announced, Liz Field is joining us on 1 September to take over the CEO position from Tim. We are very fortunate to welcome someone of Liz’s calibre. (v) Outlook The need for WMA’s work has never been greater. I am confident the Association will continue successfully to promote the interest of the member firms and their clients.

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The WMA has responded to many industry consultations this year, and intervened tirelessly to shape an outcome more practical and realistic for our members and most important of all for their clients

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CHIEF EXECUTIVE’S REPORT

Chief Executive’s Report Dr Tim May to many industry consultations this Chief Executive year, and intervened tirelessly when we felt this was required to shape an outcome more practical and realistic for our members and most important of all for their clients.

Often I am asked when delivering bad news about impending change, particularly in the area of regulation, “what fights have you actually won”, and it is at this point where I like his is my first CEO Report as to stress that without the work of Chief Executive of the Wealth the WMA – its tireless education Management Association. As of those wanting to implement you can imagine, the last year has change (particularly across the been tremendously busy for all of us EU), responses to consultations; at WMA. After consulting with our the necessary interventions and members, the community and other the resultant emails, letters and interested stakeholders we finally phone calls to policy makers and rebranded from APCIMS in October legislators, and the numerous last year. Positioning ourselves in this meetings at which we put forward way has allowed us to reaffirm our our case and the sentiment of our position as the trade association for membership – the “bad news” the wealth management community, would be far worse. Unfortunately representing firms that may well go I am sorry to say that sometimes by the name investment manager, we can only dilute the flood of stockbroker, family office, private costly regulation that is heading bank or even wealth manager itself. towards our sector, we cannot stop it Effectively we are now representing completely. what firms do, as opposed to what You will already be aware that the they might call themselves.

WMA has had to devote more time Feedback to our rebranding has to the European agenda over the been positive with existing members last few years as the influence feeling on the whole that it was a of Brussels and the impact of its much needed refresh. It has also legislation on UK financial services encouraged non-members to take continues to increase. That said, our an interest in us as they feel that the engagement with the UK regulator WMA is a more appropriate home, continues. We were fortunate to be especially for those that do not able to engage with the FCA in its consider themselves stockbrokers or infancy and that level of engagement private client investment managers. has continued throughout the past Whatever our name, this year. The task of ensuring our organisation has continued to regulator is aware of our community, educate and lobby on behalf of its its issues and challenges is regulated firms and speak on behalf unending. Our own rebranding to of the 4m private individuals utilising WMA complements well the FCA’s investment related financial services own re-positioning in creating their via our members. The WMA has, ‘Wealth Management and Private as you would imagine, responded Banking Sector’.

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Despite this year seeing a European election, we maintained an ever greater lobbying capability inside the EU processes. Much of this lobbying, as said earlier, is educational in that often the business models of our firms and the entire private client process is not replicated across the continent.

However, this does not dispel our enthusiasm for representing our member firms and their clients’ interests in Brussels. Depending on the coalition’s tactical steps, some of this focus may change but given we as a country are currently committed (via the Lisbon Treaty of 2009) to accept Regulations from Brussels without National Parliament involvement, it is imperative that we continue to have seats at the table whenever retail investment activities are discussed as set down in print.

We at the WMA are ever conscious of the need to provide

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value for money to the membership by achieving a high level of service provision while maintaining rigorous financial control. Our regularly published magazine WMA Journal (previously known as Q Review) continues to receive favourable feedback and provides an excellent medium in which our members can contribute thought pieces relevant to the community.

Successful events Our Annual Conference, lunchtime seminars (which are now free of charge) and other events have continued to attract a high level of involvement from the membership which has guaranteed a good attendance. This year we returned to the Dorchester Hotel in London with our Annual Conference and attracted around 350 delegates, encouraging our members’ CEOs to attend with a free invitation which

was enthusiastically received. Over the last year we have increased the number of ‘technical’ subject matter seminars and specialist conferences which we hope has not only given our members (both full and associate) a deeper insight into matters of particular interest to our community, but also provided an excellent platform for networking and an opportunity for some of our firms to address our membership and promote their own expertise in these areas. In London we continue to run our Compliance, Financial Crime, Investment and Prudential Conferences (now in its second year) which have all proven successful, garnering much positive feedback.

As an Association, we also go to considerable lengths to engage and brief members in all parts of the British Isles, the Republic of Ireland, Channel Islands and the Isle of Man

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on relevant developments. We have maintained our twice yearly regional meetings cycle but have also held a range of Foreign Account Tax Compliance Act (FATCA) briefings in all the main membership centres as well as one-to-one meetings with member firms. In particular I have tried to see as many CEOs from within our membership to ascertain what particular issues are concerning them at the moment, ensuring that we at the WMA are responding to their needs. There has been a great deal of merger activity across our members in the last 12 months but we are also able to report new additions to our membership ensuring that membership numbers overall have not declined.

Positive progress Two years ago we unveiled a new, more functional and easier to navigate website and this was given a refresh as part of our rebranding work to WMA. You will almost certainly have received a new discrete Username and Password.

We are keen to encourage more employees from firms within our membership to use the website and at every opportunity we encourage our contacts to inform us of colleagues who should have access. As a result the number of individuals now able to access the members’ area of our website has increased considerably.

As you can see, we at the WMA have had a busy year and I am sure this will continue through 2014 and into 2015. I would like to take this opportunity to formally thank those individuals from both our member firms and associates who

contribute their time sitting on our committees, our associate members who contribute to our seminars and publications, and our sponsors who support us at our events. This is greatly appreciated and without all these vital components we would not be able to do the work we do.

Furthermore I would like to thank my staff who have supported me throughout the year and continued to work industriously for the WMA. John Barrass who spends even more time in Europe as its importance increases. Andy Thompson, whose work on operational and taxation issues has seen him take on the mantel of FATCA guru. Ian Cornwall continues to provide members with his detailed thoughts on all matters regulatory. Jason Baxter, who manages the relationship with FTSE and has overseen the expansion of the WMA Indices, as well as overseeing our events programme. Sheena Gillett, our public relations and communications executive who maintains and develops all our communication links while overseeing the continuing development of our web and E-facilities. Michelle Read, our Finance and Business Services Manager and Pauline Young and Amanda Wall, who continue to support both myself and the team on all administrative matters as well as Emma Clarke who supports the team in her role as Committee Coordinator and Shennelle Morant who joined us originally as part of our graduate programme but is now fully integrated into the WMA team and supports Ian and John on both the UK and European regulatory work.

Not only do we have a capable team internally but our efforts to

work with key stakeholders such as the Prudential Regulatory Authority and the Financial Conduct Authority are beginning to show very positive signs of improvement over their predecessor organisation the FSA. This can only be good news for our membership at large.

I am confident that in the next year the WMA is well placed and ready to act on your behalf, promoting your services industriously.

Plans are underway to launch a new initiative within WMA under the banner of the Wider Share Ownership Council (WSOC). As part of some specific refocusing from our rebrand, we have begun to take forward an exciting drive to push home the need for more direct retail investment in shares and bonds.

This we believe, will become a vital ingredient in driving the need for a deeper savings culture across the UK and our initial priority in this area will be to remove any barriers that seem to stop UK individuals following this investment path.

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I have tried to see as many CEOs from within our membership to ascertain what particular issues are concerning them at the moment, ensuring that we at the WMA are responding to their needs

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UK Regulation

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his Annual Report essentially covers the first year of the new regulatory regime encompassing PRA and FCA. The majority of our members are solely regulated by the FCA who have adopted a more open and transparent approach than the FSA in terms of their engagement with firms and the WMA. During the year the wealth management sector team within the FCA has become fully established and we have maintained regular dialogue with them on a range of issues. The FCA is seeking to ensure we are aware of policy and supervisory developments and seeking our input at an early stage. We have also provided the opportunity for FCA to engage with firms where they are seeking feedback on developments in the wealth management sector.

During the year member firms have had to continue to manage a high degree of regulatory change.

Some of the changes originate from Europe whereas other changes are ‘home grown’. Major regulatory changes during the year covered Capital Requirements Directive (CRD) IV, Retail Distribution Review (RDR) adviser charging, restrictions on the distribution of unregulated collective investment schemes, and the review of the client assets regime for investment business. In addition, there were thematic reviews and finalised guidance published by the FCA on a range of topics which firms needed to review and action. With assistance from our committees, the WMA has sought to alert firms to the changes through updates and where appropriate, detailed question and answers papers (our

popular “Q&As”). We would remind member firms that we very much welcome feedback from them on the support we provide and many of the revisions to our material arise from feedback from member firms on specific issues.

We estimate that during the FCA’s first year, WMA member firms would have had to have read over 3,500 pages of regulatory material; this is a conservative estimate, for example, it excludes the text of speeches and final enforcement notices. Unfortunately, we anticipate the level of regulatory changes that firms will need to manage will continue at or above this level for the foreseeable future.

We would comment further on the following issues: CRDIV The implementation of CRDIV presented a major challenge to firms. The European Commission’s deadline for the implementation of CRD IV was unrealistic. The European Banking Authority were unable to produce templates on time, validation fields were incorrect and many issues were still to be addressed after the implementation date of 1st January 2014. However, we worked closely with the FCA to try and ensure our firms were able to meet their obligation on time.

We will, if appropriate, be providing further feedback to firms following the FCA’s review of the first reports submitted by firms.

RDR There has continued to be a stream of changes to the RDR adviser charging rules together with feedback from the FCA’s thematic reviews. We have very recently issued further material which we hope will clarify this issue particularly

in respect to the application of the adviser charging rules to the WMA model. We do have concerns, which we have made known to the FCA, that the surveys produced for the RDR thematic reviews are entirely based on a financial adviser model and it is difficult for WMA member firms to understand how certain of the questions in the survey relate to their business models.

Financial Services Compensation Scheme (FSCS) – The FSA revised their funding model for the FSCS at the beginning of 2013 shortly before the establishment of the FCA. As we outlined in last year’s Annual Report, we repeatedly told the FSA that promotional activities of regulated firms can give rise to a situation whereby such firms make no contributions to FSCS but their activities can give rise to significant claims on FSCS. It will be of no consolation to member firms to know that the default claims arising from Catalyst Investment Group Limited are due to their promotional activities and the level of claims originating from UK and overseas investors charged to the investment intermediation class will be in the order of £47million.

We continue to meet regularly with HM Treasury, the Financial Services Compensation Scheme, the Financial Ombudsman Service, the Practitioner Panel Secretariat and the Money Advice Service. As well as a range of ad hoc meetings with other parties, such as the Law Commission, where they are conducting work that may impact on our sector.

We are also represented on the PRA practitioner panel which helps us serve our dual regulated (PRA and FCA) members which tend to be larger banking entities.

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During the year the wealth management sector team within the FCA has become fully established and we have maintained regular dialogue with them on a range of issues

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For more information, www.thewma.co.uk/members/ policy-support/uk-regulation/

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European Business

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ur work in the EU during the 2013/14 period was characterised by the process of finalising a number of key legislative dossiers that will have a major impact on the wealth management sector going forward.

The reason for the urgency was the termination in April 2014 of the five-year legislative mandate of the European Parliament elected into office in May 2009. The mandate had coincided with the intense period of international political focus on the global financial markets following the financial crisis of 2008/09 and the ensuing raft of measures agreed at G20 level for global implementation.

In the EU this had translated into a stream of legislative proposals to the European Parliament and Council from the European Commission’s Internal Market Directorate under the Commissioner, Michel Barnier.

Both Parliament and Council were keen to finish the legislative process of scrutiny and amendment of as many as possible of the Commission initiatives, before the European elections of May 2014 changed the character of Parliamentary representation – and before the Commissioner changed as well, since Barnier’s five-year term was also completed in 2014 and his successor will be appointed to come into office on 1 November this year.

The result was an intense buildup of legislative traffic from the summer of 2013, and the need for commensurate lobbying and

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We wrote numerous papers on different aspects of the proposed legislation to provide the intellectual and informational underpinning to the cases we negotiated

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educative work by the WMA to ensure that draft texts were changed to meet our members' interests and concerns, and that, where necessary, undesirable or damaging proposals were removed. This led to frequent and regular visits to Brussels to meet key MEPs – mainly the rapporteurs for the Parliamentary versions of the different Directives and Regulations – and European Commission officials. It also entailed working closely with HM Treasury to brief them on particular aspects of our concerns and to enlist their support in European Council negotiations between member states. It also meant keeping the FCA fully in the picture both so their own briefing of the government, Commission and politicians reflected and supported our own, and so they understood our situation in our own discussions with them. Finally, we wrote numerous papers on different aspects of the proposed legislation to provide the intellectual and informational underpinning to the cases we negotiated.

A series of successes The outcome of this process was an unprecedented series of successes for APCIMS/WMA in the way the legislation finally voted into EU law by the European Parliament turned out. The main voting day was the Parliamentary Plenary on 15 April 2014, in the last week of the life of the 2009 Parliament, when some 30 new European laws were placed on the statute book. These included the Markets in Financial Instruments Directive/Regulation (MiFID/MiFIR), Packaged Retails and Insurance Based Investment Products (PRIIPS), Central Securities and Depositories Regulation (CSDR), and the Markets Abuse Directive/ Regulation (MAD/MAR), all of which are of key importance for WMA firms. Significant legislation for WMA that was agreed earlier included the Capital Requirement Directive/ Regulation (CRD/R), while some legislation was eventually left for the next Parliament and further work by the WMA to influence appropriately, such as the fourth Anti Money

Laundering Directive/Regulation (AMLD/R) and the General Data Protection Regulation (GDPR).

The WMA in all these critical new laws gained a number of changes of importance to our firms. In the MiFID/R we secured the elimination of language that would have terminated the retail service provider model widely used in the UK's retail markets; in CSDR we made sure that the ability to buy in for smaller stocks was protected and that compulsory dematerialisation was a decision that must be made one day by the UK government and not Brussels: and on PRIIPS we had success in a number of areas such as keeping equities and bonds out of scope (except for investment companies that the Commission insisted were funds and not equity), eliminating dual liability, reinserting a lost derogation on the Key Investment Information Document (KIID) provision in distance selling, and writing in a derogation from such provision altogether for discretionary fund managers. These and other gains now voted into law will fit much better with the business models of WMA member firms and serve their clients well when the laws become rules in two or so years from now and count as material benefits to our community.

The one area in which we were unable to gain success for WMA members was in the costs disclosure requirements of MiFID/R and PRIIPs. This is because language that will be very difficult and expensive to fulfil on disclosing aggregate costs of an investment including costs deriving from a fund manager, which WMA firms may not be able to obtain, and on disclosing the cumulative effect of costs on the return on an investment, which may be impossible to judge, was inserted in the opaque trialogues at the last moment without public scrutiny. So we were unable to influence it. However we have made plain as a result of this input that trialogues between institutions, with no reference to public engagement or wishes, are no way to make legislation in a democratic European system.

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in the questionnaires and surveys to others, including various of the UK Parliament's Select Committees in both Houses and in key Parliamentary and City groupings.

During the reporting period we completed a number of returns involving a review of the EU's processes and institutions. These included surveys by the European Parliament's committee on Economic and Monetary Affairs (ECON Committee), European Securities and Markets Authority (ESMA), and the European Commission, and the Balance of Competences Review by HM Treasury. We utilised our experiences in the last year of educating, explaining, and lobbying, and our reaction to the trialogue process, to provide a series of statements covering the comprehensive range

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of views we had established on the EU, its institutions, and their operation. These provide an important base from which to argue for strategic change in favour of better and more targeted treatment of the European retail financial services markets in general and the WMA community in particular.

They also help to persuade key institutions and individuals of the just nature of our cause. They have been taken up by HM Treasury in particular in their response to the Balance of Competences work.

But we have also deployed the thinking and arguments beyond the immediate organisations involved

Better outcomes In turn we have distilled our thinking as set out in our replies to the surveys into an EU Policy Statement about the EU retail financial services markets. This is short (about five pages) and takes as its starting point the fact that there is no EU internal market in retail financial services but a series of domestic ones based in each EU member state. We note that this was recognised in the European Commission's Financial Services Action Plan of 1999 (the FSAP: still unamended). So retail financial services legislation should not be on the basis of a single market with one-size-fits-all countries and market structures, but differentiated according to type of market and the cultural and tax specificities of each member state. This would mean approaching such legislation differently from that applied to the wholesale financial markets, and using Directives, which bring national Parliaments and Regulators into play, rather than Regulations, which do not.

We believe that an altered way of legislating and regulating for retail financial markets in this way in the new five-year mandate would produce better outcomes for firms, consumers and Europe as a whole.

We have circulated our Statement very widely among European and UK Parliamentarians, officials, and influential private sector bodies, and will be following up with the arguments we make in it in the coming years as we re-engage with the new European Parliament and Commission when they get into their legislative stride during 2014.

For more information, www.thewma.co.uk/members/ policy-support/eu-regulation/

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Trading, Operations and Tax

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s always WMA’s work in the areas of trading, operations and tax in 2013/14 was wide-ranging and varied. Some of the key areas of work WMA focused on last year are set out below.

2013/14 was once again dominated

by FATCA – the Foreign Account Tax Compliance Act. Following the UK-US Intergovernmental Agreement (IGA) in September 2012, the UK signed similar reciprocal agreements with Guernsey, Jersey, and the Isle of Man in October 2013 and with Gibraltar in November 2013.

One of the ways of meeting the due diligence requirements under FATCA and the UK IGAs is by obtaining a self-certification from the client. WMA, with the help of a number of member firms produced separate template selfcertification forms in respect of individuals, trusts, and entities. These were made available to member firms along with separate explanatory notes to accompany each form.

In addition WMA provided updated Q&A as well as flowcharts in respect of the due diligence procedures and classification of trusts.

As reported earlier in this Review, the Central Securities Depositories Regulation was finalised in April 2014 and, with dematerialisation seemingly no longer on the agenda for the foreseeable future, WMA’s focus in 2013/14 was the buying-in and settlement discipline aspects of the CSD Regulation.

Lobbying in Europe WMA and a delegation of market makers visited Brussels in October 2013 to lobby for a flexible buying-in regime to take account of both liquid and less liquid securities and the final text of the CSD Regulation has helpfully reflected that.

WMA also worked with the market makers in May 2014 to respond to the European Securities Markets Authority (ESMA) Discussion Paper on technical aspects of the proposed buying-in process with our focus on how best to define liquidity.

Our overriding aim is to ensure that any regime that is introduced does not have a detrimental impact on the UK RSP model which is vital for aiding client segregation of assets.

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WMA and a delegation of market makers visited Brussels in October 2013 to lobby for a flexible buying-in regime to take account of both liquid and less liquid securities The UK along with most other EU Member States will move from T+3 to T+2 standard settlement on Monday, 6 October 2014 and WMA has actively participated in the T+2 Implementation Working Group chaired by Euroclear UK & Ireland and including trade associations, execution venues and central counterparties along with FCA and Bank of England as observers.

As part of the preparations WMA surveyed its membership in May 2014 to both help raise awareness and also flesh out any issues of concern. Those that responded indicated that they were starting to actively engage with relevant counterparties. The only major concern was to seek to ensure that the settlement date for funds would also move to keep within one day of equity settlement and that as many funds as possible move settlement dates at the same time.

In 2013 WMA continued to lobby in respect of retail access to IPOs, particularly where the company coming to market was retail-focused. In November 2013 WMA, in conjunction with Peel Hunt, published the results of a survey of members in respect of their participation in the Royal Mail IPO. The results of the survey, perhaps not surprisingly indicating major concerns with allocation policy and size of the scaleback, have been useful in discussions with both the press and policy makers alike, not least in the recent meeting on this subject convened by the No 10 Policy Unit. This work also provided a solid basis for our work on WSOC which has been referred to earlier in the Chief Executive’s report.

WMA hosted two meetings – February and April 2014 – between member firms and representatives from TeX (a not-forprofit organisation that facilitates the electronic re-registration of funds) to discuss how the Service Level Agreement could better match the transfer processes of wealth managers. Ultimately it is for member firms to decide whether they wish to join TeX or not and which method and

which vendor they use to process those transfers. FCA were also involved with us on this topic and provided transfers occur sensibly, in the best interests of clients, have no preference for the mechanisms used for such transfers. WMA will continue to facilitate relevant discussions or seminars on this topic where it is deemed appropriate to do so.

Welcome developments WMA very much welcomed the Government’s decision to remove Stamp Duty/SDRT from Growth Market Shares from 28 April 2014. This coupled with the ability to put such shares in ISAs from August 2013 were both welcome developments as was the 2014 Budget announcement that the overall amount that could go into an ISA each year would increase to £15,000 from 1 July this year.

For AIM shares, it is worth noting that retail clients provide a significant amount of liquidity (transactional activity). It can often be as high as 45% of the transactional volume versus less than 5% for many full listed shares.

HMRC undertook a review of much of its VATFIN guidance in 2013/14 and one area where WMA has expressed concerns relates to VAT treatment of SIPPs. Correspondence with HMRC VAT Policy team culminated in a meeting in April 2014 to discuss the proposed revised VATFIN5700 Notice. WMA members’ main concern is the unlevel playing field in terms of VAT treatment between insurance backed SIPPs and non-insurance backed SIPPs. Proposed draft changes were sent to HMRC in May 2014 but at time of writing a final version of the VATFIN Notice has not yet been published.

For more information, www.thewma.co.uk/members/ policy-support/operations-and-tax/

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Indices, Membership & Events Indices In terms of changes to the weighting of the asset classes, it has been a quiet year for the Private Investor Indices. Changes have been made where necessary, based on the information derived from our quarterly survey completed by our members. In addition to making changes to the weightings the committee continues to examine issues that may have a massive impact on the indices in the future.

Work has been undertaken to examine the underlying indices and their suitability and relevance for our members, and the current offering as a whole.

Membership Despite continued consolidation within the wealth management sector and the resultant loss of members from mergers and acquisitions, interest in the WMA remains positive with a number of new firms joining over the year and even more expressing an interest in joining in the near future. In order to maintain our membership numbers while at the same time attracting new firms, the WMA has increased its offering to provide more obvious value for money.

While the lobbying powers of a trade associations are attractive to members or potential members, and the educational aspect of the WMA service is certainly valued, we have tried to augment our offering in 2013/2014. We have increased our visibility to our members and their employees by increasing our user database which has swollen to 6,000, more than double that which it was before the revamp of our website and a substantial increase since our rebranding to the WMA. With more employees enjoying access to our information and services, more individuals from our firms are benefiting from the WMA knowledge bank and this

16 2013/2014 Report

in turn has increased awareness of WMA work. Furthermore it has obviously increased the number of those individuals on the distribution list for our publications and event notifications and as a result we have seen a surge in interest and attendance at our events.

With respect to publications, the WMA Update continues to provide recipients with a thorough understanding of the issues that the WMA and its committees are discussing/working on at any given time. Our popular Q&A “guides” on topics such as Suitability, Retail Distribution Review (RDR), Foreign Account Tax Compliance Act (FATCA), Capital Requirements Directive (CRD) etc are continuing to receive praise from members.

The WMA Journal (rebranded from Q Review), our quarterly “glossy” publication, also provides readers with interesting thought pieces on a variety of issues be it compliance, investment, tax, operations or IT related while also providing Associate members with a platform to air their views and promote solutions to issues relevant to our core membership.

An easily quantifiable benefit of membership and one that has generated a great deal of positive feedback from members since it was introduced last year relates to the 50% discount our members achieve from FTSE with respect to the purchase of a licence for the use of the FTSE WMA Private Investor Indices. Very often this has led to a four figure discount and in the case of some of our larger firms it has manifested itself in as much as a five figure saving. This discount is only applicable to WMA members and has in itself prompted new firms to approach WMA as the monetary benefit is more than obvious.

Events The number of WMA events significantly increased in 2013/2014 and with it the number of our firms’ employees who benefitted from the learning and networking experience that came with this enhanced programme. Similar to our WMA

Journal, Associate members have been encouraged to speak on topics where they feel they can add value with their expertise. This has provided an excellent platform for them and an opportunity to promote their service/product. Furthermore we have been fortunate in that the regulator has on many occasions spoken to firms at our events, providing our members with an opportunity to address, get access to and ask questions of policy makers and supervisors whose actions have a direct consequence on them.

Our regional briefings programme which consists of two visits per year to each of the 15 “regions” we have designated was further enhanced with a series of regional seminars on the subject of FATCA. While our lunchtime seminar programme continues, our special events which include our Investment Conference, Compliance conference, Financial Crime Conference, Prudential Conference and Annual

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YEAR IN REPORT

Conference continue to prove to be valued by our community.

Our Investment Conference attracted almost 100 delegates, focussing on Investment and front office issues. The event itself was followed by the very successful New Year / Spring Drinks Reception which attracted close to 300 guests. From the apparent positive atmosphere it was quite obvious that a good night was had by all.

The Compliance Conference (in its tenth year) provided those attending with an excellent round up of the regulatory issues that should be on every firm’s radar. Attention was paid to the regulation from Europe that is continuing to have a significant impact on UK firms.

Our Financial Crime Conference continued to attract an enviable number of delegates as did the Prudential Conference – now in its second year.

2013’s Annual Conference attracted over 350 delegates with a very diverse and high profile

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range of speakers. Held at the Dorchester Hotel in London, feedback from delegates and sponsors (without whose support an event such as this could not be staged was unanimously positive with many delegates staying well into the evening enjoying the opportunity to network and catch up with old friends and colleagues.

Highlights of the morning session included a presentation by FCA chairman John Griffith-Jones and a Wealth Management panel that included four CEOs from within our membership who were probed

by WMA chairman Tim Ingram on the issues that were currently concerning them. In this session delegates were able to get a glimpse from these firms of just four of the varied business models that make up our trade association’s membership. Completing the morning session were presentations

by Neil Smith of Hampden Capital and Verena Ross of the European Securities Markets Authority (ESMA).

Our afternoon speakers proved just as interesting and entertaining as those who preceded them. Dr Frederick Mulder spoke about his life and his passion for both art and philanthropy. Lord Harrison informed delegates of the scrutiny role of the UK parliament in EU economic and financial affairs. He was in turn followed by Liz Jackson, a successful entrepreneur and business woman who enthralled and inspired those present with her achievement and her “can do” attitude – achievements made all the more remarkable given she is blind.

The final session of the conference was dedicated to economics and the markets. Three economists delivered excellent presentations beginning with Kevin Gardiner of Barclays who provided a very positive picture of the UK and the world in a presentation entitled “Life after Debt”. He was followed by Katie Koch of Goldman Sachs who focussed on emerging markets, making a very good case for investing in them. Finally Dr Gerard Lyons (Economic advisor to the Mayor of London) put the microscope on the UK in the context of the global economy.

After the formal part of the conference was over a drinks reception was held with our special guest speaker Rory Bremner who entertained those remaining with jokes and impressions of politicians and other public figures.

This light-hearted end to the day ensured everyone left with a smile on their face.

“

With more employees enjoying access to our information and services, more individuals from our firms are benefiting from the WMA knowledge bank

2013/2014 Report

17

COMMITTEES AND WORKING GROUPS

European and International Committee With European level regulatory business growing in scale and direct importance to WMA members, it has been essential to have a Committee focusing solely on this area and assessing where WMA should target resources most effectively to influence European processes most favourably for our members.

Financial Crime Committee The Financial Crime Committee aims to discuss all financial crime matters of significance such as anti-money laundering measures, serious organized crime, terrorist financing, share fraud, identity theft, and boiler rooms with a view to ensuring problems are kept fully informed of relevant legislative and regulatory developments, and can pick up on the latest approaches to combat financial crime.

FTSE/ WMA Private Investors Indices Committee The WMA Indices committee is responsible for ensuring the asset allocation of the Private Investor Indices is relative to the community. It examines compiled asset allocation information and makes changes where necessary.

It will also ensure that existing underlying indices are appropriate and mindful of new asset classes that are being used by discretionary investment managers, include these where possible.

Operations Committee This Committee meets monthly and discusses settlement and other operational issues affecting WMA member firms. As well as responding to consultation papers relevant to operational issues, the Committee also flags practical issues firms have experiences and potential solutions available.

Prudential Committee This Committee ensures that the interests and views of WMA member firms are properly represented with UK and European

18 2013/2014 Report

policy makers regarding the prudential requirements on financial services firms.

Regulatory Committee The purpose of the Regulatory Committee is to advise WMA on all regulatory matters of significance to its membership through reviewing proposals from regulatory bodies, government initiatives relating to regulatory environment and any other regulatory issues that could impact upon, the WMA community.

This Committee is held on a monthly basis.

Retail Markets Committee This Committee seeks to represent the interests and views of those WMA member firms who provide a service to individual “retail” investors. This covers specific trading and trade execution issues as well as an interest in wider UK and European proposals as they impact on the retail investor. The Committee meets six times a year.

Taxation Committee The Committee focuses on issues relating to those taxes that have a commercial impact on WMA member firms, including any impact on clients where appropriate.

This includes direct taxes such as income tax, inheritance tax, stamp duty, capital gains tax, VAT as well as other related tax areas such as tax efficient wrappers and other tax exempt vehicles. The Committee, which meets 4 times a year, will also have regard to developments in other jurisdictions which are thought to be of relevance to WMA members.

WMA Trading Group The Trading Group discusses specific trading issues that affect WMA member firms and the wider market. Whilst most of its focus is on the Retail Services Provider model, the Group also looks at exchange and multilateral trading facility-related issues as they impact on the retail market. The Group includes Heads of Trading from both stockbroking and

investment management firms and meets four times a year.

Broker-Registrar Operations Working Party The Working Party includes a number of WMA member firms and the three main registrars and is primarily used to discuss processing and quality of service issues between brokers and registrars. The quarterly meetings take place by conference call.

Corporate Bonds Since the financial crisis hit the headlines with the Northern Rock situation, volatility in the equity markets has made it essential to ensure that a wide range of financial investments is available for clients.

Corporate Bonds have presented strong possibilities in this climate and the Corporate Bond Working Party was controlled in 2009 after the Lehmans collapse to pool knowledge assessing how the UK retail market could be developed, and prepare WMA policy towards regulatory and other issues.

European Strategy Working Group The ESWG examines the strategic context of WMA’s work in the EU, taking account of international political and regulatory pressure, UK government policy and changes in the regulatory structure of the EU. It also develops the overarching messages that WMA should communicate in its position on policies, consultations and proposals published by European bodies and considers how best to inform those outside of WMA about current and potential European issues.

FATCA Working Party Established in 2010 in response to the US Government’s withholding and information exchange proposals in the Foreign Account Tax Compliance Act, the Working Party has helped formulate WMA responses to consultation Notices issued by the US Treasury and Internal Revenue Service. The Working Party convenes on an

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EVENTS

ad hoc basis as and when draft rules and regulations are published.

FTSE Hedge Investment Trust Working Party This working party ensures that the constituents within the FTSE Hedge Investment trust Index are appropriate and meet the relevant criteria for inclusion Market Maker Working Party The Marker Maker Working Party provides a forum for market makers to discuss with WMA issues, both UK and European, which could impact on the UK Retail Service Provider (RSP) model.

Training and Competence Working Party Established in 2008, the Training and Competence Working party provides a forum for discussing training and competence practices amongst WMA member firms and for addressing issues that impact upon them. These meetings are held on a quarterly basis.

www.thewma.co.uk

2013/2014 Report

19

WMA BOARD

Tim Ingram (Chairman)

Andrew Ross (Deputy Chairman) Cazenove Capital Management

Dr Tim May (Chief Executive) WMA

Paul Farrant J M Finn & Co Ltd

Ruthven Gemmell Murray Asset Management Ltd

Jonathan Wragg Investec Wealth & Investment Ltd

Sir David Howard Bt Charles Stanley & Co Ltd

Paul Killik Killik & Co LLP

David Lamb St James’s Place

Gareth Pearce Smith & Williamson Investment Management Ltd until September 2013

Andy Pomfret Rathbone Investment Management Ltd

David Semaya Barclays Wealth until December 2013

The Earl Ferrers Ruffer LLP until June 2013

Jimmy McCulloch Speirs & Jeffrey Ltd

Jane Tuffnell Ruffer LLP, from July 2013

Charlotte Black Brewin Dolphin Ltd, from September 2013

David Cobb Smith and Williamson Investment Management Ltd, from October 2013

Rupert Dickinson Barclays Wealth, from January 2014

20 2013/2014 Report

www.thewma.co.uk

WMA BOARD

ACCOUNTS

22 2013/2014 Report

www.thewma.co.uk

ACCOUNTS

Directors’ Report

T

he directors present their report and accounts for the year ended 31 May 2014.

The company changed its name to Wealth Management Association from Association of Private Client Investment Managers and Stockbrokers on 9 October 2013.

Principal activities The company’s principal activity during the year continued to be to look after the interests of and represent the views and concerns of private client investment managers, private banks and private client stockbrokers all over the UK, Ireland, the Channel Islands and Isle of Man and it expects to do so in the forseeable future.

Business review The net asset position as at 31 May 2014 was £1,682,397 (2013: £1,862,877). There was a loss before tax of £180,775 for the 2014 year (2013 loss: £32,817).

Revenue was up by 3% from £1,790,274 to £1,852,822 and the cost of sales (direct costs) was up by 6% from £151,897 to £161,507.

The gross profit was up by 3% from £1,638,377 to £1,691,315.

Administration costs rose by 13% from £1,698,300 to £1,920,767.

This increase in administration costs of £222,467 included all expenses relating to the rebrand of the organisation from APCIMS to WMA. The details of the results for the year are set out on page 26.

The company has taken advantage of the special exemption under the Companies Act 2006 for small companies not to produce an enhanced business review.

Directors The following persons served as directors during the year: • Tim Ingram (Chairman) • Tim May (Chief Executive) (resigning from 6th October 2014) • Andrew Ross (Deputy Chairman) • Paul Chavasse (alternate) (resigned July 2013) • Mary Anne Daly (alternate) (resigned July 2013)

• Stephen Elliott (alternate) (resigned July 2013) • Charlotte Black (appointed September 2013) • David Cobb (appointed October 2013) • Rupert Dickinson (appointed January 2014) • Paul Farrant • Ruthven Gemmell • Sir David Howard Bt • Paul Killik • David Lamb • James McCulloch • Gareth Pearce (resigned September 2013) • Andy Pomfret • David Semaya (resigned December 2013) • Jane Tufnell (appointed July 2013) • The Earl Ferrers (resigned June 2013) • Jonathan Wragg

Disclosure of information to auditors Each person who was a director at the time this report was approved confirms that: • so far as each director is aware, there is no relevant audit information of which the company’s auditor is unaware; and • each director has taken all the steps that he/she ought to have taken to make himself/herself aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

Statement of Directors’ Responsibilities The directors are responsible for preparing the report and accounts in accordance with applicable law and regulations.

Company law requires the directors to prepare accounts for each financial year. Under that law the directors have elected to prepare the accounts in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these accounts, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • prepare the accounts on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

This report was approved by the board on 24 October 2014 and signed on its behalf.

Auditor Deloitte LLP have indicated their willingness to be reappointed for another term.

Tim Ingram (Chairman) Director 24 October 2014

Directors indemnities The company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.

Small company provisions This report has been prepared in accordance with the provisions in Part 15 of the Companies Act 2006 applicable to companies subject to the small companies regime.

2013/2014 Report

23

ACCOUNTS

Independent auditors’ report to the members of Wealth Management Association (formerly Association of Private Client Investment Managers and Stockbrokers)

W

e have audited the financial statements of Wealth Management Association (formerly Association of Private Client Investment Managers And Stockbrokers) for the year ended 31 May 2014 which comprise the Profit and Loss Account, the Balance Sheet and the related notes 1 to 12. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (Effective April 2008) United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require

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us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

financial statements are prepared is consistent with the financial statements.

Scope of the audit of the accounts An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material mis-statement, whether caused by fraud or error.

This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition we read all the financial and non- financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit; or • the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption from preparing a Strategic Report.

Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the company’s affairs as at 31 May 2014 and of its loss for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and • have been prepared in accordance with the requirements of the Companies Act 2006.

Fiona Walker (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor London United Kingdom 24 October 2014

Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given in the Directors’ Report for the financial year for which the

2013/2014 Report

25

ACCOUNTS

Profit and Loss Account for the year ended 31 May 2014 Notes

2014 (£)

2013 (£)

Turnover

1,852,822

1,790,274

Cost of services to members

(161,507)

(151,897)

Gross profit

1,691,315

1,638,377

Administrative expenses

(1,920,767)

(1,698,300)

(229,452)

(59,923)

4,507

(1,929)

Operating loss

2

Exceptional items: profit/(loss) on the disposal of investments

(224,945)

(61,852)

Income from investments

8,561

8,846

Interest receivable

35,609

20,189

(180,775)

(32,817)

295

(11,197)

(180,480)

(21,620)

Loss on ordinary activities before taxation Tax on loss on ordinary activities

3

Loss for the financial year Turnover and the loss for the year derived from continuing operations.

Balance Sheet as at 31 May 2014 Notes

2014 (£)

2013 (£)

4

10,493

11,108

Debtors

5

119,948

183,908

Investments held as current assets

6

226,114

222,077

1,600,183

1,716,343

1,946,245

2,122,328

(274,341)

(270,264)

Net current assets

1,671,904

1,852,064

Total assets less current liabilities

1,682,397

1,863,172

Fixed assets Tangible assets Current assets

Cash at bank and in hand

Creditors: amounts falling due within one year

Provisions for liabilities

7

8

Net assets

(295) 1,682,397

1,862,877

1,682,397

1,862,877

1,682,397

1,862,877

Capital and reserves Profit and loss account Shareholders' funds

9

The accounts have been prepared in accordance with the provisions in Part 15 of the Companies Act 2006 applicable to companies subject to the small companies regime.

Tim Ingram (Chairman) Director Approved by the Board on 24 October 2014

26 2013/2014 Report

www.thewma.co.uk

ACCOUNTS

1. Accounting policies Basis of preparation The accounts have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008).

Going concern The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the forseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Turnover Turnover represents the value, net of value added tax and discounts, of goods provided to customers and work carried out in respect of services provided to customers.

Depreciation Depreciation has been provided at the appropriate rates in order

to write off the assets over their estimated useful lives. All classes of assets are depreciated over a period of four years using the straight line method.

Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.

Taxation Current tax, including UK Corporation tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. No corporation tax was due for the 2014 or 2013 years as pre tax losses appertained. As Wealth Management Assocoation is a small company the small company rate of 20% would apply if pre tax profits were present.

Full provision is made for deferred taxation resulting from timing differences between the recognition of gains and losses in the accounts and their recognition for tax purposes. Deferred taxation is calculated on an un-discounted basis at the tax rates which are expected to apply in the periods when the timing differences will reverse.

Pensions The company operates a defined contribution pension scheme.

Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme.

Investments Investments are valued at the lower of cost and market value.

2. Operating profit 2014 (£)

2013 (£)

7,694

8,700

288,675

259,375

4,600

4,500

2014 (No.)

2013 (No.)

This is stated after charging: Depreciation of owned fixed assets Directors’ remuneration Auditors’ remuneration The company made no pension contributions for directors

The average number of persons employed by the company (including executive directors) during the year, analysed by category, was as follows: CEO

1

1

Staff

14

12

15

13

28 2013/2014 Report

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ACCOUNTS

3. Taxation UK corporation tax (prior year adjustment) Deferred tax

2013 (£)

2012 (£)

–

10,580

(295)

(617)

At the year end the company had £204,000 corporation tax losses, and £6,000 other tax losses carried forward on which no deferred tax asset has been recognised since the company does not have forecast profits. The value of the unrecognised deferred tax asset at the substantively enacted tax rate of 20% was £42,000.

4. Tangible Fixed Assets Computer equipment (£)

Furniture (£)

Office equipment (£)

Total (£)

At 1 June 2013

43,255

68,591

10,276

122,122

Additions

6.282

393

404

7,079

At 31 May 2014

49,537

68,984

10,680

129,201

At 1 June 2013

38,007

63,386

9,621

111,014

Charge for the year

3,520

3,713

460

7,694

At 31 May 2014

41,527

67,099

10,082

118,708

At 31 May 2014

8,010

1,885

598

10,493

At 31 May 2013

5,248

5,205

655

11,108

Cost

Depreciation

Net book value

5. Debtors 2014 (£)

2013 (£)

Trade debtors

25,702

61,481

Prepayments

71,290

103,134

Other debtors

22,956

19,293

119,948

183,908

6. Investments held as current assets 2014 (£) Listed investments Unallocated cash held for future investment Listed investments at market value including unallocated cash

www.thewma.co.uk

2013 (£)

224,339

218,352

1,775

3,725

226,114

222,077

300,113

302,040

2013/2014 Report

29

ACCOUNTS

7. C reditors: amounts falling due within one year 2014 (£)

2013 (£)

Trade creditors

89,201

97,168

Other taxes and social security costs

45,599

53,014

Other creditors

139,541

120,082

274,341

270,264

8. Provisions for liabilities Deferred taxation Accelerated capital allowances

2014 (£)

2013 (£)

–

295

At 1 June

295

912

Deferred tax charge in profit and loss account

(295)

(617)

–

295

At 31 May 2013

9. Profit and loss account 2014 (£) At 1 June 2012

1,862,877

Loss for the year

(180,480)

At 31 May 2013

1,682,397

11. Members’ capital The company was incorporated on 17 November 1994 as a company limited by guarantee.

The members of the company have each agreed to contribute a sum not exceeding £10 in the event of the company being wound up.

At 31 May 2014 the company had 184 (2013: 186) members.

Members are not entitled to participate in a surplus in the event of winding up of the company, any surplus remaining will be transferred to institutions having objects similar to the objects of the company.

The members are the ultimate controlling party.

12. Related parties transactions Smith and Williamson Investment Management Limited is the custodian of the investments and is also a member of the company.

Fees of £470 (2013: £470) were charged for this service. There were no other related party transactions requiring disclosure.

10. Other financial commitments 2014 (£)

2013 (£)

295

912

150,150

147,250

The company had annual commitments under noncancellable operating leases as set out below: Operating leases which expire: within two to five years

30 2013/2014 Report

www.thewma.co.uk

Detailed Profit and Loss Account for the year ended 31 May 2014 Turnover Sales Workshops and seminars

2014 (ÂŁ)

2013 (ÂŁ)

1,711,615

1,683,170

10,078

27,654

131,129

79,450

1,852,822

1,790,274

(59,923)

(91,227)

Q Review

11,451

21,136

Workshops and other events

150,056

130,761

Cost of providing services to members

161,507

151,897

1,244,933

1,119,193

Professional fees

178,402

158,369

Property costs

204,714

190,940

General expenses

241,248

180,705

Printing postage and stationery

21,854

16,641

Depreciation

7,694

8,700

Travel

10,936

9,916

Committee meetings

5,573

5,873

Entertaining

5,413

7,963

1,920,767

1,698,300

Conference fees Available to provide services to members Services to members

Administrative expenses Staff costs

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2013/2014 Report

31

NEW LOGO TO COME

No responsibility for loss to any person acting or refraining from acting as a result of any material contained in this publication can be accepted by the WMA, the author, publisher or printer. The views expressed by individual contributors are not necessarily those of the Association.

Company limited by guarantee. Registered in England and Wales.

No 2991400. VAT registration 675 1363 26. Published for the WMA

by WordWide London. Copyright WMA 2014.

22 City Road Finsbury Square London EC1Y 2AJ Tel: +44 (0)20 7448 7100 Fax: +44 (0)20 7638 4636 www.thewma.co.uk Twitter: @wma_uk Members: enquiries@thewma.co.uk Non-members: info@thewma.co.uk